In Re Ford Motor Co. ERISA Litigation

ORDER MODIFYING AND ADOPTING THE MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION AND DENYING DEFENDANTS’ MOTION TO DISMISS STEPHEN J. MURPHY, III, District Judge. INTRODUCTION This litigation presents a question that has challenged federal courts: given that the Employee Retirement Income Security Act (“ERISA”) excuses certain retirement-plan fiduciaries from any duty to diversify the holdings of the plans they manage, but otherwise requires them to engage in “prudent” management, how is a court to determine when an undiversified plan of this kind has been imprudently managed? The suit involves a claim under the Employee Retirement Income Security Act *886 (“ERISA”) against Ford Motor Company and several related persons and organizations (collectively, “Ford”). Currently before the Court are the defendants’ objections to Magistrate Judge Steven Pepe’s Report and Recommendation (“R & R”) of denial of defendants’ motion to dismiss the complaint for failure to state a claim. The facts of the case are ably set forth in the R & R, and need not be repeated here since the only issues before the Court are purely legal ones. Suffice it to say that the plaintiffs are various salaried and hourly employees who are current or former participants in the 401(k) retirement savings plans provided by Ford to its employees. They complain of Ford’s management of two of these plans, the Ford Motor Company Tax-Efficient Savings Plan for Hourly Employees and the For Motor Company Savings and Stock Investment Plan for Salaried Employees (jointly, “the plans”). At all relevant times, the governing documents of these plans required them to be invested primarily or exclusively in Ford’s own stock. Ford also offered numerous other more diversified mutual funds and other investment funds; subject to minor restrictions, employees could direct their retirement savings into whichever plan they preferred. The defendants are Ford Motor Company itself, and numerous of its employees and related organizations who were involved in administering the plans. They will collectively be referred to as “Ford.” At all times relevant to this case, Ford also served as the fiduciary of the plans. The plaintiffs’ allegations are that it mismanaged the plans — and thus violated ERISA — by continuing to invest them entirely in its own stock even as the company fell into financial straits. Ford’s instant motion is to dismiss the complaint, for failure to allege a breach of Ford’s fiduciary duties under ERISA. Magistrate Judge Pepe recommended that the motion be denied, and Ford has filed objections to that recommendation. ANALYSIS I. Standard of Review A District Court’s standard of review for a magistrate judge’s report and recommendation depends upon whether a party files objections. With respect to portions of an R & R that no party has objected to, the Court need not undertake any review at all. Thomas v. Arn, 474 U.S. 140, 150, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985). On the other hand, Federal Rule of Civil Procedure 72(b) states, in relevant part: The district judge to whom the case is assigned shall make a de novo determination upon the record, or after additional evidence, of any portion of the magistrate judge’s disposition to which specific written objection has been made in accordance with this rule. The district judge may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instructions. Thus, the Court will conduct de novo review of the R & R with respect to Ford’s objections. “[Wjhen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, ‘this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.’ ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, -, 127 S.Ct. 1955, 1966, 167 L.Ed.2d 929 (2007) (citations omitted). Accordingly, Federal Rule of Civil Procedure 12(b)(6) allows a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true. See Minger v. Green, 239 F.3d 793, 797 (6th Cir.2001) (citations omitted). *887 In assessing a motion brought pursuant to Rule 12(b)(6), the Court must presume all well-pleaded factual allegations in the complaint to be true and draw all reasonable inferences from those allegations in favor of the non-moving party. Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir.1993). To determine whether Plaintiff has stated a claim, the Court will examine the complaint and any written instruments that are attached as exhibits to the pleading. Fed.R.Civ.P. 12(b)(6) & 10(c). Although the pleading standard is liberal, bald assertions and conclusions of law will not enable a complaint to survive a motion pursuant to Rule 12(b)(6). Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir.1996). The Court will not presume the truthfulness of any legal conclusion, opinion, or deduction, even if it is couched as a factual allegation. Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987). The Federal Rules of Civil Procedure “do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is ‘a short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). This standard requires the claimant only to put forth “enough facts to raise a reasonable expectation that discovery will reveal evidence of [the requisite elements of the claim].” Bell Atlantic, 127 S.Ct. at 1965. Thus, although “a complaint need not contain ‘detailed’ factual allegations, its ‘[fjactual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true.’ ” Ass’n of Cleveland Fire Fighters v. Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. Sept.25, 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, -, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007)). Therefore, the Court will grant a motion for dismissal pursuant to Rule 12(b)(6) only in cases where there are simply not “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic, 127 S.Ct. at 1974. II. Governing Law This dispute is essentially over the application of the legal duties imposed by ERISA. Ford does not dispute that it was the plan fiduciary, or that ERISA duties applied to it; instead Ford claims that its conduct as alleged in the complaint did not breach those duties. “[T]he duties charged to an ERISA fiduciary are ‘the highest known to the law.’ ” Chao v. Hall Holding Co., Inc., 285 F.3d 415, 426 (6th Cir.2002). ERISA, as codified at 29 U.S.C. § 1104(a)(1), sets out the standard of conduct ordinarily required of plan fiduciaries: [A]fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and— (A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan; (B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (D) in accordance with the documents and instruments governing the plan insofar as such documents and instru *888 ments are consistent with the provisions of this subchapter and subchap-ter III of this chapter. Here, Magistrate Judge Pepe concluded, and the plaintiffs do not object, that the relevant plans are Employee Stock Ownership Plans (“ESOPs”), which are a type of Eligible Individual Account Plan (“EIAP”) within the meaning of 29 U.S.C. § 1107(d). Paragraph (a)(2) of 29 U.S.C. § 1104 modifies the duties applicable to the fiduciaries of EIAPs: In the case of an eligible individual account plan (as defined in section 1107(d)(3) of this title), the diversification requirement of paragraph (1)(C) and the prudence requirement (only to the extent that it requires diversification) of paragraph (1)(B) is not violated by acquisition or holding of qualifying employer real property or qualifying employer securities (as defined in section 1107(d)(4) and (5) of this title). Thus, while ERISA recognizes that investing an entire plan in a single stock is often imprudent, in the case of EIAPs it nonetheless expressly permits these investments, while still purporting to require prudence in other respects. Courts, therefore, are in the difficult position of attempting to pass on the “prudence” of these sorts of funds without considering what would normally be regarded as their severe underdiversification. An overly strict scrutiny of EIAPs would read the diversification exemption out of the statute, while excessively lenient review would subject the residual prudence requirement to the same fate. Cf. Donovan v. Cunningham, 716 F.2d 1455 (5th Cir.1983) (comparing Congressional policy of “encouraging] the formation of ESOPs” with the “equally forceful” policy of “safeguarding the interests of participants ... by vigorously enforcing standards of fiduciary responsibility”); Moench v. Robertson, 62 F.3d 553, 570 (3d Cir.1995). Paralleling the tension between protecting plan assets and promoting EIAP formation is the tension between an ERISA fiduciary’s duty to be prudent, on the one hand, 29 U.S.C. § 1104(a)(1)(B), and on the other hand its duty to manage the plan in accordance with its governing documents unless other ERISA duties dictate otherwise, id. § 1104(a)(1)(D). The courts have recognized that when an EIAP’s governing documents require that all or most of the plan’s assets be invested in the stock of the employer-settlor, the fiduciary is thus required to navigate a narrow channel between two different forms of liability— the Scylla of unwarranted disobedience to the plan documents lurks on one side, while the Charybdis of imprudence swirls on the other. In other words, Because an ESOP is at once a permissible form of ERISA trust and nondiversi-fied by definition, the trustee (along with the named fiduciary) is in an awkward position. If he diversifies he violates the plan, but if he doesn’t diversify he may be imposing unwanted risk on the employee-shareholders — for it is unrealistic to suppose that the ESOP form was chosen because the employees wanted to bear unnecessary risk. Summers v. State Street Bank & Trust Co., 453 F.3d 404, 410 (7th Cir.2006). In Moench, the Third Circuit resolved this dilemma by holding that “an ESOP fiduciary who invests the assets in employer stock is entitled to a presumption that it acted consistently with ERISA by virtue of that decision. However, the plaintiff may overcome that presumption by establishing that the fiduciary abused its discretion by investing in employer securities.” Id. at 571. In Kuper v. Iovenko, 66 F.3d 1447, 1458 (6th Cir.1995), the Sixth Circuit adopted a similar standard: we review an ESOP fiduciary’s decision to invest in employer securities for an *889 abuse of discretion. In this regard, we will presume that a fiduciary’s decision to remain invested in employer securities was reasonable. A plaintiff may then rebut this presumption of reasonableness by showing that a prudent fiduciary acting under similar circumstances would have made a different investment decision. Applying this presumption, the Kwper court held that a fiduciary’s mere “aware[ness] of events that would continue to cause [the company’s] stock to decline in value” was not sufficient to create liability, when the evidence was that the stock price fluctuated throughout the relevant period. Id. Magistrate Judge Pepe concluded, and this Court agrees, that the Kuper presumption is crucial and must be applied in this case. Judge Pepe also concluded that the defendants have pleaded facts sufficient to overcome the Kuper presumption of prudence. Ford’s objections to this recommendation are essentially threefold. First, it objects that it cannot be liable for investing the fund solely in its own stock because the plan documents instructed it to do so. Second, Ford asserts that Magistrate Judge Pepe improperly applied the Kuper presumption, which (Ford claims) should bar recovery even on the facts asserted in the complaint. Third, Ford claims that Judge Pepe improperly considered its EIAPs in isolation, instead of in the context of the overall portfolio of retirement funds Ford offered to its employees. Because the overall fund is much more diversified, says Ford, considered as a whole its management has not been imprudent. The Court will consider each of these objections in turn. III. Settlor-Intent Defense The plaintiffs recognize that the plan documents themselves required plan funds to be invested primarily or exclusively in Ford stock. Ford asserts that because these were instructions to the plan fiduciary, it cannot be liable in its fiduciary role for following them, even if doing so was imprudent. This Court is not free to do so, however, because such a holding would be contrary to the plain language of ERISA, which as noted requires fiduciaries to act “in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter.” 29 U.S.C. § 1104(a)(1)(D) (emphasis added). The Supreme Court has declared that “trust documents cannot excuse trustees from their duties under ERISA,” Cent. States, S.E. & S.W. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 568, 105 S.Ct. 2833, 86 L.Ed.2d 447 (1985), and in Kuper the Sixth Circuit specifically held that the purpose and nature of ERISA and ESOPs preclude a plan’s per se prohibition against diversification or liquidation .[A] plan provision that completely prohibits diversification of ESOP assets necessarily violates the purposes of ERISA. ERISA provides that a fiduciary may only follow plan terms to the extent that the terms are consistent with ERISA. 29 U.S.C. 1104(a)(1). Kuper v. Iovenko, 66 F.3d 1447, 1457 (6th Cir.1995). Indeed, ERISA would be almost impotent if it permitted settlors to exempt their fiduciaries from its requirements with a simple stroke of the pen. This is especially so in a case like this one, where the settlor essentially designates itself as the fiduciary. Ford asserts that Magistrate Judge Pepe grounded his recommendation on the erroneous proposition that in amending the plan to require exclusive investment in its own stock, Ford was acting as a fiduciary of the plan as opposed to its settlor. The Court is inclined to agree *890 that the , amendments were settlor acts, not fiduciary ones. But Kuper makes this issue superfluous: if amending the plans were indeed a fiduciary act (which seems unlikely), Ford could be liable if the amendments required imprudent management of the plans. But if in following those instructions (by acquiring and holding company stock) Ford actually did manage the plans imprudently in its fiduciary capacity, that would independently create liability under § 1104(a)(1). In other words, since in this case Ford managed the plans in accordance with the instructions that it wrote into the documents, it will be liable for any imprudence in the instructions as a result of following them, regardless of whether it would also be liable for giving them. TV. Application of the Kuper Presumption A. Ford’s most substantial objection is that it is theoretically inconsistent with Kuper’s presumption of prudence to permit liability even when the only factors driving down an employer’s stock price are matters of public information. Ford asserts that there is “no logical limiting principle” for determining how much bad news is too much, requiring a fiduciary to divest the plan of company stock. Cf. Summers v. State Street Bank & Trust, 453 F.3d 404 (7th Cir.2006) (“determining the ‘right’ point, or even range of ‘right’ points, for an ESOP fiduciary to break the plan and start diversifying may be beyond the practical capacity of the courts”); Pedraza v. Coca-Cola, 456 F.Supp.2d. at 1276 (N.D.Ga.2006) (“If any combination of factors potentially can overcome Moeneh’s presumption, ERISA fiduciaries are left with no meaningful guidance as to when they should, or should not, ignore an ERISA plan’s requirement to offer company stock.”) As a result, Ford argues, permitting liability based only on public information amounts to a collapse back into ordinary prudence, in defiance of the Ku-per presumption of prudence. Ford elaborates by stressing that in the absence of a fraud on the market, fiduciaries cannot be expected to outguess the market as to how the publicly-known risks connected with a stock should be priced. It cites Summers, 453 F.3d 404, in which the Seventh Circuit noted that “it would be hubris” for fiduciaries to try to predict a company’s future better than the market can. Id. at 409. This Court does not doubt the truth of that proposition, but finds it insufficient to justify dismissal of the complaint. The plaintiffs here do not claim that Ford should have divested the plans of Ford stock because the stock’s risk was improperly priced. Rather, they claim that the risk was so great that, efficiently priced or not, it was imprudent under the circumstances to subject the plan’s assets to it. Thus, plaintiffs are arguing not that the defendants should somehow have known that the market was wrong about Ford stock, but instead that the downside risk built into that price was simply intolerable for a plan of this type. Cf. id. (noting the irresponsibility of investing retirement savings “in a single stock that, while worth as much as its market valuation (as far as anyone not possessing inside information could know), was extremely risky”). Ford’s briefs can also be read as arguing that, because the market can be relied upon to price risk efficiently, the Kuper presumption means that holding a publicly-traded stock can never be regarded as imprudently risky. Defendants assert that “[t]he suggestion that Ford stock could be prudent for some investors at the same time it was imprudent for all Plan participants reverses the presumption of prudence.” Reply br., p. 4. The Court finds *891 this argument to be unpersuasive. Indeed, if one accepts the efficient market principles on which Ford’s argument is based, the risk involved in a stock becomes one of the key factors that an ERISA fiduciary (or any investor) must consider in deciding whether to buy or hold it. Ford’s argument is predicated on the fact that a stock’s price is determined not just by what the corporation is worth today, but also the entire range of potential values that it might have tomorrow, next week, next month, and next year. Only one price in the range of potential values will become the actual value at any given time, however, which means that today’s market price will also reflect the relative probabilities that the stock will attain each of its range of potential values. As a result, the market might rationally assign identical prices to Stock A and Stock B, where Stock A’s value and dividends have an overwhelming likelihood of increasing slightly, and Stock B has a relatively small likelihood of exploding a hundredfold in value, but also a small likelihood of becoming completely worthless. The only rational basis on which a fiduciary could choose between two such stocks would be a consideration of their differing risk profiles in light of the purpose of the plan— and when part of that purpose is to provide savings for potential retirees, a lower level of risk is highly desirable. See Steinman v. Hicks, 852 F.3d 1101, 1104 (7th Cir.2003) (“[Assuming that the plan’s participants were risk averse, a truncated distribution of expected returns would have been preferable ... even if the average of those returns would be no higher or even somewhat lower.”). As the Summers court recognized, employees are even more risk-sensitive with respect to holdings of their employers’ stock, because the employers’ financial fortunes will affect not just the value of its employees’ EIAP accounts but their expected future wages as well. Summers, 453 F.3d at 409. For Ford’s argument to carry the day, then, the Court would have to conclude that ESOP fiduciaries have no duty under ERISA to consider their plan beneficiaries’ level of risk tolerance. Such a conclusion would apparently mean that the only remaining duty of such a fiduciary would be to ensure that nothing is impeding market mechanisms from accurately pricing the stock. In the Court’s view, this would, in one fell swoop, demote the ERISA duty of prudence from being “the highest known to law,” Chao v. Hall Holding Co., 285 F.3d 415, 426 (6th Cir.2002), to being largely illusory. This result would be contrary not only to common sense but also to the regulations implementing ERISA, which provide that to satisfy the statutory duties a fiduciary must, among other things, “tak[e] into consideration the risk of loss and the opportunity for gain (or other return) associated with the investment or investment course of action.” 29 C.F.R. § 2550.404a-l(b). The Court therefore will not adopt the position advocated by Ford in this regard. B. Ford stresses that a requirement of either knowledge of imminent collapse or the existence of fraudulently inflated stock prices would be a much brighter line on which to premise liability. It cites several cases in which courts concluded that only in these conditions could the presumption of prudence be overcome. E.g., In re Coca-Cola Enterprises, Inc. ERISA Litigation, No. 1:06-CV-0953, 2007 WL 1810211, *10 (N.D. Ga. June 10, 2007); Pedraza v. Coca-Cola Co., 456 F.Supp.2d 1262, 1275-76 (N.D.Ga.2006) (collecting cases on both sides of this issue); La-Londe v. Textron, Inc., 270 F.Supp.2d 272, 280 (D.R.I.2003), vacated in part, 369 F.3d 1, 7 (1st Cir.2004). *892 It may be true that such a rule would be more administrable than an undifferentiated standard of prudence, although the Court doubts that “imminent collapse” is as clearly delineated a condition as Ford suggests. For the reasons just stated, however, this approach strikes the Court as insufficiently attentive to the statutory text. In the Court’s view, a stock can be imprudently risky for an employee savings plan even in the absence of fraud or imminent collapse. It is entirely possible that a company built on high speculation — for instance, one with no clear path to profitability, but with possibly tremendous potential — could, without fraud, attract a huge amount of capital from highly risk-tolerant investors, and thus be in no danger of imminent collapse despite being extraordinarily risky. This Court is unable to say as a matter of law that such a company’s stock could never be an “imprudent” investment for an EIAP, especially one whose participants were mostly near retirement and particularly risk-averse. Cf. Steinman v. Hicks, 352 F.3d 1101, 1106 (7th Cir.2003) (recognizing the relevance of participant characteristics). The problem running through Ford’s proposed application of the Kuper standard as the Court sees it is that it asks for the drawing of a bright line where Congress has declined to create one. The foregoing analysis should make clear that, if the doctrine adopted by Magistrate Judge Pepe has “no logical limiting principle,” it is not because he misapplied Ku-per ’s presumption of prudence, but rather because the statutory standard itself— “prudence” — has no tidy limiting principle. Kuper may create a presumption that a fiduciary was prudent, but it does not and cannot change this underlying standard of conduct, which must be applied through a thorough analysis of the facts of each case. In this matter as in many others, fiduciaries and courts alike must rely on common sense and experience to supplement airtight logic. Of course, it indeed is usually imprudent for a fiduciary to hold stock that has been fraudulently inflated in value, or to hold stock in a collapsing company. To the extent the cases cited by Ford rule this way, they are certainly laudable efforts to simplify the administration of portions of the statutory standard. What Ford is asking for here, however — a declaration that these are the only ways in which an ESOP fiduciary can be “imprudent” under ERISA — is a complete replacement of the standard enacted by Congress with one created by the courts. Whether or not Ford’s suggested standard is easier to administer than the one chosen by Congress, such a substitution is impermissible. To the extent that the cases cited by Ford conclude otherwise, the Court is unpersuaded by them. c. The Court notes, however, that even as a matter of pure logic, the rule articulated by ERISA and Kuper does not leave EIAP fiduciaries in the Sixth Circuit entirely without guidance as to how to discharge them duty of prudence. As noted above, ERISA excuses such fiduciaries from “the prudence requirement (only to the extent that it requires diversification).” 29 U.S.C. § 1104(a)(2). This is necessary because, as many courts have noted, it is almost always imprudently risky to invest most or all of a fund’s assets in a single stock. E.g., Summers, 453 F.3d at 406; Steinman v. Hicks, 352 F.3d 1101, 1104-05 (7th Cir.2003). But the statutory language plainly retains the duty of prudence except insofar as it would dictate diversification. See Kuper, 66 F.3d 1447, 1458 (6th Cir.1995); Moench, 62 F.3d at 569. As a result, this Court finds that the Kuper presumption of prudence means that 29 U.S.C. *893 § 1104(a)(l)-(2) requires fiduciaries to divest their plans of company stock when holding it becomes so risky — that is, so imprudent — that the problem could not be fixed by diversifying into other assets. In other words, with respect to EIAPs, an abuse of discretion under Kuper begins (and the presumption of prudence ends) at the point at which company stock becomes so risky that no prudent fiduciary, reasonably aware of the needs and risk tolerance of the plan’s beneficiaries, would invest any plan assets in it, regardless of what other stocks were also in that plan’s portfolio. 1 If anything, Magistrate Judge Pepe applied a standard more favorable to Ford than this one. On the one hand, he acknowledged that pleading fraud or imminent collapse is not necessary to make out an ERISA imprudence case against an EIAP fiduciary: nothing in Kuper rules out the possibility of demonstrating imprudence by [instead] showing that the stock has become excessively risky as a result of massive mismanagement; overwhelming debt and liabilities; conflicted, self-serving and disloyal fiduciaries; and the very real possibility that a company’s fortunes are so diminished that it is at risk of collapse. R & R at 909. On the other hand, the standard Judge Pepe adopted was very similar to one of imminent collapse. Specifically, he concluded that “Plaintiffs must prove that Defendants were aware of facts showing that Ford’s viability as an ongoing concern was in jeopardy,” or “must show a precipitous decline in the employer’s stock combined with evidence that the company is on the brink of collapse or is undergoing serious mismanagement.” Id. at p. 913 (internal quotation marks, alteration, and citation omitted). Ford’s instant objection is that Magistrate Judge Pepe applied the wrong standard, not that he misapplied the standard he adopted. Thus, the Court will not engage in a detailed review of the facts, but instead will adopt Judge Pepe’s conclusion that under his standard — requiring pleading that “Ford’s viability as an ongoing concern was in jeopardy” or “that the company is on the brink of collapse” — the plaintiffs have “plead[ed] substantial bases for establishing that Ford stock became an imprudent investment option for participants’ retirement savings during the Class Period.” Id. p. 913. 2 Since the plaintiffs *894 have met this standard, the Court concludes that they have also met the standard adopted by the Court — namely, that Ford stock would not have been a prudent holding for the plans’ beneficiaries even as part of a more diversified portfolio. The plaintiffs would thus survive this motion to dismiss under both prior precedent, as articulated by Judge Pepe, and under the newer formulation adopted by this Court. V. Individual Fund or Entire Portfolio? Ford’s final objection is that the prudence of holding Ford stock should be assessed with an eye to its entire universe of retirement-plan options, rather than only in the context of the EIAPs themselves. As authority for this position, Ford cites 29 C.F.R. 2550.404a-l(b)(2)(I), which states that a fiduciary must determine “that the particular investment or investment course of action is reasonably designed, as part of the portfolio (or, where applicable, that portion of the plan portfolio with respect to which the fiduciary has investment duties), to further the purposes of the plan.” See also Laborers Nat’l Pension Fund v. N. Trust Quantitative Advisors, Inc., 173 F.3d 313, 322 (5th Cir.1999) (the regulations “require!] that the investment be reasonably designed as part of the portfolio to further the purposes of the plan”) (emphasis added). Ford’s position is that because its employees were free to diversify their individual holdings by spreading them across the various funds Ford offered to them, considering the EIAPs in isolation greatly exaggerates the risks they created for the participants’ savings. The plaintiffs disagree, noting that “a fiduciary of a defined contribution, participant-driven, 401(k) plan ... who is given discretion to select and maintain specific investment options for participants [ ] must exercise prudence in selecting and retaining available investment options.” DiFelice v. U.S. Airways, Inc., 497 F.3d 410, 418 (4th Cir.2007); see also id. n. 3. As a result, they claim, Ford had a fiduciary duty to ensure that each of the funds offered in its plan was a prudent one. The Court’s analysis of the Kuper presumption obviates any need for further consideration of this question. The Court has already concluded that if it would be prudent to hold company stock as part of a diversified portfolio, then a fiduciary will not violate its ERISA duties by offering it as the exclusive holding of an EIAP. As a result, it makes no difference whether Ford’s EIAPs are considered on its own or in conjunction with the other funds: either way, the relevant question is whether Ford stock would have been a prudent component of any hypothetical diversified portfolio. Since the Court has concluded that plaintiffs have pleaded a claim under that standard, no further consideration of this objection is required. OTHER MATTERS The plaintiffs sent a letter to the Court dated October 23rd, 2008, requesting a settlement conference. 3 The defendants have responded that this letter was a violation of the Rules of Civility of this District and request an order prohibiting further such communications. Docket no. 100. The Court will grant both requests. WHEREFORE, it is hereby ORDERED that: Magistrate Judge Pepe’s Report and Recommendation is MODIFIED as set forth herein, and ADOPTED as so modified; *895 Defendants’ motion to dismiss the complaint for failure to state a claim on which relief can be granted is DENIED; All further requests that this Court take any action shall be in the form of motions, and shall be electronically filed before a paper copy is submitted to the Court; and The case is REFERRED to Magistrate Judge Steven Pepe for a settlement conference, to be scheduled by Judge Pepe. REPORT AND RECOMMENDATION DENYING DEFENDANTS’ MOTION TO DISMISS (DKT.# 73) STEVEN D. PEPE, United States Magistrate Judge. This is a consolidated Employee Retirement Income Security Act of 1974 (“ERISA”) case brought by certain salaried and hourly Ford employees against Ford Motor Company and various fiduciaries of the Ford 401(k) plans. While not yet certified as a class action under Fed. R.Civ.P. 23(b)(3), this Court previously selected lead and liaison counsel under Rule 23(g)(2) because of the inability of the Plaintiffs to agree on such counsel and for efficient management of this action (Dkt. # 59 & # 60). The parties subsequently submitted a stipulated scheduling order (Dkt.# 69) requiring that Plaintiffs file a Consolidated Class Action Complaint (“Complaint”) on or before April 30, 2007 (Dkt. # 70 & # 71), and that Defendants answer or otherwise respond to the Complaint on or before June 29, 2007. Accordingly, Defendants filed a motion to dismiss on June 29, 2007 (Dkt.# 73), which Plaintiffs filed a 40 page response to on August 14, 2007 (Dkt.# 76). Defendants filed their 20 page reply on September 14, 2007 (Dkt.# 77). Defendants' motion to dismiss was referred for report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) (Dkt.# 75). On March 4, 2008, a hearing was held on Defendants’ motion at which time all unresolved issues were addressed. For the reasons indicated below, it is recommended that Defendants’ motion to dismiss be DENIED. I. Factual and Procedural Background The 95 page, 293 paragraph Complaint filed against Ford Motor Company (“Ford” or the “Company”), certain officers and directors of the Company, and other fiduciaries of the 401(k) retirement savings plans established and sponsored by Ford as a benefit for its employees, including the Ford Motor Company Tax-Efficient Savings Plan for Hourly Employees (the “TESPHE”) and the Ford Motor Company Savings and Stock Investment Plan for Salaried Employees (the “SSIP”) (collectively, the “Plans”) allege that from April 15, 2000, to the present (the “Class Period”) Defendants breached their fiduciary duties under ERISA, in six principal ways: (1) selecting and maintaining Ford Motor Company stock as an investment for the Plans when it was no longer a suitable or prudent investment option; (2) encouraging participants in the Plans to invest in Ford Motor Company common stock; (3) continuing to invest Company contributions in Ford Motor Company common stock and failing to divest the Plans from shares in Ford common stock at a time when that investment option became imprudent due to the poor financial and operating performance of the Company; (4) abdicating their continuing duty to review, evaluate and monitor the suitability of the Plans’ investment in Ford Motor Company common stock; (5) failing to provide accurate, material information to enable the Plans’ participants to make informed investment decisions concerning their contributions in *896 vested in Ford Motor Company common stock; and (6) failing to monitor others of the Plans’ fiduciaries and to provide them with information sufficient to perform their duties overseeing the Plans and their investments. Plaintiffs seek relief pursuant to § 409 and § 502 of ERISA, 29 U.S.C. §§ 1109, 1132, on behalf of all participants in or beneficiaries of the Plans who sustained losses in their retirement accounts. A. The Ford Plans The Plans are intended to be 401 (k) defined contribution plans under the Internal Revenue Code (Compl.™ 1, 23). Ford established the Plans to assist its employees in systematically saving and investing for retirement, and to “provide them with an opportunity to become stockholders of the Company” (SSIP Plan Document, as amended effective through April 13, 2006, attached to Compl. as Exhibit (“Ex.”) B, Ford-ER00085 (“2006 SSIP Plan Document”); TESPHE Plan Document, as effective on September 15, 2003, attached to Compl. as Ex. C, Ford-ER00001, Ford-ER00004 (“2003 TESPHE Plan Document”)). The Plans supplement the principal retirement benefits Ford provides to its employees through two qualified defined benefit plans: the Ford-UAW Retirement Plan, which covers hourly employees represented by the United Autoworkers Union (“UAW”), and the General Retirement Plan, which covers substantially all other Ford employees in the United States hired on or before December 31, 2004 (See Ford Motor Company, Annual Report, Form 10K, Note 22 (filed Feb. 28, 2007), available at http:// www.sec.gov/edgar/searchedgar/ companysearch.html (file number 001-03950)). 1 The SSIP allows eligible employees to make pre-tax and after-tax contributions to the Plan, provided that those contributions in aggregate do not exceed fifty-percent of the employee’s salary for the relevant pay period, subject to limitations based on the employee’s compensation and applicable federal laws (2006 SSIP Plan Document, Article III, §§ 3.1(a)-(b), 3.4(a)-(e), Ford ER00095-96, Ford-ER00100-105). For most of the putative class period, Ford also made matching contributions to the SSIP for the benefit of participants, subject to the Plan’s provisions (2006 SSIP Plan Document, Article III, § 3.1(d)). The TESPHE allows hourly employees to contribute to either the Tax-Efficient Savings Account or the After-Tax Savings Account within the Plan (2003 TESPHE Plan Document, Article IV, §§ 1-3, Ford-ER00009-11). The TESPHE is similar in many respects to the SSIP; pertinent differences include that participants in the TESPHE are limited to hourly employees and Ford has not made matching contributions during the Class Period (Compl.™ 36-43). Like the SSIP, TESPHE participants may contribute no more than fifty percent of their salary per pay period, subject to additional limitations based on the employee’s compensation and applicable laws (2003 TESPHE Plan Document, Article TV, § 4(b), Ford-ER00013). Participants in either Plan may invest their contributions in one or more of dozens of investment options specified in each Plan Document, including the Ford Stock Fund, the Common Stock Index Fund, the *897 Bond Index Fund, the Interest Income Fund and a large number of mutual funds and other investment funds with a range of risk and return characteristics (2006 SSIP Plan Document, Article IV, § 4.1, Ford-ER00108; 2003 TESPHE Plan Document, Article VII, Ford-ER00018). 2 Participants may transfer assets within their accounts to different investment options at any time with the exception that transfers into the Ford Stock Fund in the SSIP are limited to five transfers per month (2006 SSIP Plan Document, Article IV, § 4.2(a), Ford-ER00109). 3 The Plans are intended to comply with ERISA Section 404(c), 29 U.S.C. § 1104(c). 4 On or before April 13, 2006, the SSIP provided that the Ford Stock Fund “shall be invested primarily in shares of Company Stock” and that For each participant who elects ... to have contributions invested in the Ford Stock Fund ..., the Trustee shall invest the sums so to be invested ... in accordance with instructions of a person, company, corporation or other organization appointed by the Company. (SSIP Plan Document, as amended effective through April 1, 2004, attached to Compl. as Ex. A, Article VIII, § 8.1(a), Ford-ER00722 (“2004 SSIP Plan Document”)). Similarly, on or before April 6, 2006, the'TESPHE provided that one of the investment options available to participants is the Ford Stock Fund, and investments in which “shall be made primarily in Company Stock.” (2003 TESPHE Plan Document, Article XIII, § 1(a), Ford-ER00029). Ford, in its capacity as settlor, amended various provisions of the Plans throughout the putative class period, and continued to permit the Plans’ assets to be invested in the Ford Stock Fund. In 2006, Ford amended the Plans’ Documents to affirm its objective to offer the Ford Stock Fund to Ford employees (2006 SSIP Plan Document, Article VTII, § 8.1(a)), Ford-ER00130 (“It is the Company’s intent that to the fullest extent permitted by ERISA, that the Ford Stock Fund be a permanent feature of the Plan[.]”), Amendments to the SSIP and TESPHE dated April 13, 2006, attached to Compl. as Ex. E, Ford-ER00069 (same) (“April 13, 2006, Amendments”); Amendments to TESPHE dated April 6, 2006, attached to Compl. as Ex. D, Ford-ER00422 (“April 6, 2006, Amendments”). The 2006 Plan Documents provide that the Ford Stock Fund constitutes employee stock ownerships plans *898 (“ESOPs”) under ERISA Section 407(d)(6), 29 U.S.C. § 1107(d)(6)(A), and require the assets of the Ford Stock Fund to be invested exclusively in Ford stock, except for a small percentage invested in cash or cash equivalents to provide liquidity for daily activity (2006 SSIP Plan Document, Article, VIII, § 8.1(a), Ford-ER00130; April 13, 2006, Amendments, Ford-ER00067-69; April 6, 2006, Amendments, Ford-ER00422). On April 13, 2006, Ford also amended the Plans to provide for the appointment of an independent fiduciary, entirely unrelated to Ford, with respect to the Ford Stock Fund (Comply 195). The amendments directed the independent fiduciary to invest the assets of the Ford Stock Fund “exclusively in Company Stock” unless the fiduciary determines “from reliable public information that there is serious question concerning the Company’s short term viability as a going concern.” (Id. citing Ford-ER00069). The independent fiduciary has made no such determination and therefore the assets of the Ford Stock Fund continue to be invested in Ford stock under its stewardship. B. The Parties The lead Plaintiffs in this action are David Cooper (“Cooper”) and Mark Ousa-chi (“Ousachi”) (collectively, the “Plaintiffs”). Cooper is a current employee of Ford and has been since 1986, and is a participant in the SSIP (Comply 14). Ou-sachi was employed by Ford from May 2000 to December 2003 and was a participant in the SSIP during his employment. Id. at ¶ 15. Neither of the Plaintiffs was or is a participant in the TESPHE. See Id. at ¶¶ 14-15. The Complaint identifies distinct groups of fiduciaries of the Plans and describes their fiduciary duties based on the Plans’ Documents. Id. at ¶¶ 44-99. Defendants do not challenge their fiduciary status in their motion. The following are the groups of Defendants: Ford is responsible for administering the Plans. It is responsible for selecting the investment alternatives offered by the Plans, including the Ford Stock Fund, and thus exercises fiduciary discretion and authority in this regard. Id. at ¶¶ 51-68. The “Executive Officer Defendants,” comprised of the Chief Operating Officer, Chief of Staff, and the Vice Chairman from time to time of Ford, determine whether to make matching contributions under the Salaried Plan and the amount of such contributions. Id. at ¶ 70. The “VP Defendants” are eight known current and former officers and an unknown number of unknown current and former officers of Ford, as set forth in ¶ 17 of the Complaint. Under the Salaried Plan they are responsible for appointing, renewing, and removing trustees and investment advisors, approving policies relating to the allocation of contributions and the distribution of assets among trustees and investment advisors, approving Plan amendments not related to matching contributions, modification of the Salaried Plan, and suspension of the operation of any provisions of the SSIP. Id. at ¶ 72. They have substantially similar duties under TESPHE. Id. at ¶¶ 77-80. The “IPC Defendants” are comprised of designated officers of Ford who are members of the “Investment Process Committees” under the Plans. With respect to the SSIP, the IPC Defendants recommended investment process guidelines that included the investment options to be offered under the SSIP, including the Ford Stock Fund. Id. at ¶¶ 82-87. An “Investment Process Committee” was instituted for the Hour *899 ly Plan during the Class Period, with duties similar to that of the Investment Process Committee for the Salaried Plan. Id at ¶¶ 88-91. The “IPOC Defendants” are comprised of designated officers of Ford who are members of the “Investment Process Oversight Committee” (“IPOC”) under the Plans. The IPOC Defendants are charged with reviewing the performance of the investment options under the Plans and considering any recommendations from the respective Investment Process Committees. Id at ¶¶ 93-98. The “Doe Defendants” are fiduciaries of the Plans during the Class Period whose identities are unknown to Plaintiffs. Once their true identities are ascertained, Plaintiffs will seek leave to join them under their true names. C. The Claims Count I alleges that all Defendants failed to prudently and loyally manage the Plans and assets of the Plans, in violation of ERISA, by (a) continuing to offer Ford stock as an investment option for participant contributions under the Plans and (b) for both employee and employer contributions to the Ford Stock Fund, continuing to invest the assets of the Ford Stock Fund in Ford stock rather than in cash or other short-term investment options, while they knew or should have known that Ford stock no longer was a prudent investment for participants’ retirement savings. Id at ¶¶ 234-52. Count II alleges that Ford, the VP Defendants and the Doe Defendants who appointed the members of the IPOC, all of whom had the responsibility to appoint, and remove, and thus monitor the performance of other fiduciaries, breached them fiduciary duty by (a) failing to monitor their appointees, to evaluate their performance, or to have any system in place for doing so, and standing idly by as the Plans suffered enormous losses as a result of the appointees’ imprudent actions and inactions with respect to Ford stock; (b) failing to ensure that the monitored fiduciaries appreciated the true extent of Ford’s highly risky and inappropriate business and accounting practices and the likely impact of such practices on the value of the Plans’ investment in Ford stock; (c) to the extent appointees lacked such information, failing to provide complete and accurate information to them such that they could make sufficiently informed fiduciary decisions with respect to the Plans’ assets; and (d) failing to remove appointees who performed inadequately by continuing to make and maintain investments in Ford stock, despite their knowledge of circumstances that rendered Ford stock an imprudent investment during the Class Period for participants’ retirement savings in the Plans, and who breached their fiduciary duties under ERISA. Id at ¶¶ 253-62. Count III alleges co-fiduciary liability against all Defendants, for knowing of the breaches set forth in Counts I and II, yet participating knowingly in them, enabling them and failing to remedy them. Id at ¶¶ 263-74. Plaintiffs allege that the Plans have lost over six billion dollars as a result of their continued investment in Ford stock during the Class Period. Id at ¶¶ 35, 43, 192. Among other relief, Plaintiffs seeks an order compelling Defendants to make good to the Plans all losses to the Plans resulting from Defendants’ alleged breaches of their fiduciary duties, including losses to the Plans resulting from imprudent investment of the Plans’ assets, and to restore to the Plans all profits Defendants made through use of the Plans’ assets, and to restore to the Plans all profits which the participants would have made if Defendants had fulfilled their fiduciary obligations. *900 II. Standard of Review Fed. R. Civ. P 12(b)(6) permits dismissal' for “failure to state a claim upon which relief can be granted.” “The purpose of Rule 12(b)(6) is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even in everything alleged in the complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir.1993). “[W]hen ruling on a defendant’s motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007), Erickson v. Pardus, 551 U.S. 89, -, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007). “Rule 12(b)(6) does not countenance ... dismissals based on a judge’s disbelief of a complaint’s factual allegations,” Twombly, 127 S.Ct. at 1965 (quoting Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989)). “However, while liberal, this standard of review does require more than the bare assertion of legal conclusions.” Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir.1995). “In practice, a ... complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” In re DeLorean, 991 F.2d 1236, 1240 (6th Cir.1993) (emphasis in original) (quoting Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988)). See also, Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987) (liberal Rule 12(b)(6) review is not afforded legal conclusions and unwarranted factual inferences); Ana Leon T. v. Federal Reserve Bank, 823 F.2d 928, 930 (6th Cir.1987) (per curiam) (mere conclusions are not afforded liberal Rule 12(b)(6) review). Conley v. Gibson, 355 U.S. 41, 46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), spoke of “the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” (Emphasis supplied.). Twombly, notes that under a “literal reading of Conley’s ‘no set of facts’ standard, a wholly conclusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some ‘set of [undisclosed] facts’ to support recovery.’ ” Twombly, 127 S.Ct. at 1968. Twombly, rejects this literal reading of Conley and required that pleadings state sufficient facts to show not just a possible, but a “plausible” claim of relief. Instead of the ‘no set of facts’ standard of Conley, Twom-bly endorsed the standard that a complaint be plausible to the extent that from the facts alleged there is a “ ‘reasonably founded hope’ that a plaintiff would be able to make a case,” citing Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 347, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) and its quote from Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 741, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975). III. ANALYSIS A. The ESOP Presumption of Reasonableness Defendants assert that the Plans are ESOPs and thus they are entitled to a presumption of reasonableness regarding their continued investment in the Ford Stock Fund. They assert further that Plaintiffs have not alleged sufficient facts in their Complaint to state a claim for breach of their fiduciary duties. Plaintiffs counter that the funds are not ESOPs, but even if they are, that their allegations are more than sufficient to state an ERISA claim under Rule 8(a) and 12(b)(6) standards. *901 “In drafting the ESOP provisions of ERISA, Congress intended to encourage employees’ ownership of their employer company. In order to promote this goal, Congress carved out specific exceptions to certain fiduciary duties in the case of an ESOP.” Kuper v. Iovenko, 66 F.3d 1447, 1458 (6th Cir.1995). Thus, while ERISA ordinarily imposes high fiduciary duties of loyalty and prudence and an exclusive purpose requirement, “as a general rule, ESOP fiduciaries cannot be held liable for failing to diversify investments, regardless of whether diversification would be prudent under the terms of an ordinary non-ESOP pension plan.” Id. Moreover, an ESOP is exempted from ERISA’s otherwise strict rules against self-dealing. Id. (citing Martin v. Feilen, 965 F.2d 660, 665 (8th Cir.1992)). One of the leading cases trying to reconcile the Congressional policy of encouraging company ownership by employees and exempting such funds from the diversification requirement with the general fiduciary standards set out in ERISA is Moench v. Robertson, 62 F.3d 553 (3d Cir.1995). In Moench, the Third Circuit rejected the possibility that a de novo standard be applied toward reviewing the decisions of ESOP fiduciaries and adopted an abuse of discretion standard. It established for an ESOP fiduciary a presumption that “it acted consistently with ERISA by virtue of that decision” not to diversify. Id. at 571. It noted that this presumption could be rebutted in those narrow circumstances where “ ‘owing to circumstances not known to the settlor and not anticipated by him [the making of such investment] would defeat or substantially impair the accomplishment of the purposes of the trust.’ Restatement (Second) § 227 comment g.” Id. Thus, a plaintiff “must show the ERISA fiduciary could not have believed reasonably that continued adherence to the ESOP’s direction was in keeping with the settlor’s expectations of how a prudent trustee would operate.” Id. In adopting the Third Circuit’s approach in Moench, the Sixth Circuit similarly held, a proper balance between the purpose of ERISA and the nature of ESOPs requires ... review [of] an ESOP fiduciary’s decision to invest in employer securities for an abuse of discretion. In this regard, we will presume that a fiduciary’s decision to remain invested in employer securities was reasonable. A plaintiff may then rebut this presumption of reasonableness by showing that a prudent fiduciary acting under similar circumstances would have made a different investment decision. Id. at 1459. Adopting this standard, the Sixth agreed that a plaintiff asserting a prudence claim must show that the ESOP fiduciaries’ decision to invest in company stock was an abuse of discretion. Id. Further, “in attempting to rebut the presumption, the plaintiff must show that the ERISA fiduciary could not have reasonably believed that the plan’s drafters would have intended under the circumstances that he continue to comply with the ESOP’s direction that he invest exclusively in employer securities.” Id. (citing Moench, 62 F.3d at 571). Defendants portray Count I of the Complaint as a failure to diversify claim, as opposed to a breach of the duty of prudence under ERISA, and based on this portrayal contend that the Complaint is a “a full-scale assault” on “Congressional policies endorsing ESOPs .... ” (Dkt.# 73, p. 25). The Supreme Court has noted that in enacting ERISA, “The crucible of congressional concern was misuse and mismanagement of plan assets by plan administrators.” Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140 n. 8, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985). Accordingly, ERISA puts in place strict fiduciary *902 duties for the purpose of protecting plan assets. Kuper, 66 F.3d at 1457. These obligations, drawn from the law of trusts, include strict compliance with the duties of prudence and loyalty. The duty of loyalty requires that a fiduciary “discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and ... for the exclusive purpose of ... providing benefits to participants and their beneficiaries ....” Id. at 1458 (quoting ERISA § 404(a) (1), 29 U.S.C. § 1104(a)(1)). The duty of prudence imposes “ ‘an unwavering duty’ to act both ‘as a prudent person would act in a similar situation,’ [and] ‘with single-minded devotion’ to the plan participants and beneficiaries.” Id. (citation omitted); accord In re CMS Energy ERISA Litig., 312 F.Supp.2d 898, 905 (E.D.Mich.2004) (holding that ERISA § 404(a)(1) imposes duties of loyalty and prudence on a fiduciary). As noted above, ERISA exempts ESOP fiduciaries from the statutory duty to diversify. ERISA § 404(a)(2), 29 U.S.C. § 1104(a)(2). But this exemption is not an absolute defense to fiduciary liability, it has an outer boundary. In Kuper, the Sixth Circuit emphasized that the diversification exemption is limited: Thus, as a general rule, ESOP fiduciaries cannot be held liable for failing to diversify investments.... However, the statutory exemptions for ESOPs in ERISA ‘do[ ] not relieve a fiduciary ... from the general fiduciary responsibility provisions of [29 U.S.C. § 1104] which, among other things, require a fiduciary to discharge his duties respecting the plan solely in the interests of plan participants and beneficiaries and in a prudent fashion ... nor does it affect the requirement ... that a plan must be operated for the exclusive benefit of employees and their beneficiaries. Kuper, 66 F.3d at 1458 (original ellipses, citations omitted); accord Eaves v. Penn, 587 F.2d 453, 459 (10th Cir.1978) (“the structure of the Act itself requires that in making an investment decision of whether or not a plan’s assets should be invested in employers securities, an ESOP fiduciary, just as fiduciaries of other plans, is governed by the ‘solely in the interest’ and ‘prudence’ tests of §§ 404(a)(1)(A) and (B)”). Here, consistent with ERISA, Plaintiffs allege that Defendants breached their fiduciary duties under ERISA by continuing to offer the Ford Stock Fund as an investment option and making contributions to the fund when it no longer was a prudent investment for participants’ retirement savings. As discussed below, the Complaint sets forth in detail the bases for this allegation by describing the particular facts and circumstances that caused Ford stock to be an unduly risky and inappropriate retirement plan investment. It asserts that Defendants, who had actual or constructive knowledge of Ford’s dire financial circumstances, had a duty under ERISA and the Plans to continually evaluate the propriety of investing the Plans’ assets in Ford stock and to take action to protect the Plans if that investment was no longer prudent (Compile 170-79). They argue that the law on which this claim is based is well established, particularly in the Sixth Circuit. In re Goodyear Tire & Rubber Co. ERISA Litig., 438 F.Supp.2d 783, 793 (N.D.Ohio 2006) (holding dismissal on the pleadings improper when plaintiffs allege imprudent management of plan investment in company stock); In re AEP ERISA Litig., 327 F.Supp.2d 812, 831 (S.D.Ohio 2004) (same); CMS, 312 F.Supp.2d at 914 (same); Rankin v. Rots, 278 F.Supp.2d 853, 879 (E.D.Mich.2003) (same). B. The Plans are ESOPs As a threshold matter, Plaintiffs argue that whether the Plans are truly *903 ESOPs can and should only be determined after fact discovery, not at the pleading stage (Dkt.# 76, p. 10). In considering a defendant’s motion to dismiss, it is proper for the Court to take into account any relevant plan documents. In re Cardinal Health, Inc. Erisa Litig., 424 F.Supp.2d 1002, 1015 (S.D.Ohio 2006). Courts may consider ERISA plan documents not attached to a complaint where a plaintiffs claims are “based on rights under the plans which are controlled by the plans’ provisions as described in the plan documents” and where the documents “are incorporated through reference to the plaintiffs rights under the plans, and they are central to plaintiffs claims.” Id. (citing Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir.1997)). Thus, “materials central to the claims asserted, including exhibits to the defendant’s moving papers, may be considered when ruling on a motion to dismiss without converting it to a summary judgment motion.” Weiner, 108 F.3d at 89. 5 In support of its motion to dismiss, Defendants provide the texts of the Salaried and the Hourly Plans. These documents are therefore appropriately before the Court because Plaintiffs refer to and quote from them at length. Id. (“ ‘documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiffs complaint and are central to her claim.’ ”) (quoting Venture Assoc. v. Zenith Data Sys., 987 F.2d 429, 431 (7th Cir.1993)). Plaintiffs also attach to their Complaint a number of the Plan Documents for both the Salaried and Hourly Plans (See, Dkt. # 71, Ex. A-C; Ex. G-K). In the present case, whether the Plans are ESOPs is not, as Plaintiffs contend, a factual question requiring expert testimony. Rather, on the Plans’ Documents, it is possible for this Court to make a determination as a matter of law regarding the status of the Plans at issue. See, In re General Motors ERISA Litig., No. 05-71085, 2006 WL 897444 (E.D.Mich. Apr.6, 2006) (Edmunds, J.) (Holding that whether a Plan is an ESOP “is purely a legal question requiring application of the relevant law to the text of the Plans, a task well within the province of this Court.”). ERISA defines an ESOP as an individual account plan “which is designed to invest primarily in qualifying employer securities ....” ERISA § 407(d)(6)(A); 29 U.S.C. § 1107(d)(6)(A). ESOPs must be qualified under the Internal Revenue Code and any other requirements that the Secretary of the Treasury deems appropriate. Id. Moreover, an ESOP “must be formally designated as such” and must “specifically state[ ] that it is designed to invest primarily in employer securities.” 26 C.F.R. § 54.4975-ll(a)(2), (b). Based on a review of the Plans and the parties’ arguments, it appears that, as a matter of law, the Plans at issue are indeed ESOPs. Both Plans specifically claim to be an ESOP (see, e.g., SSIP Plan Document, as amended effective through September 1, 2001, attached to Compl. as Ex. H, Article XV, § 15.1, Ford-ER00816 (“2001 SSIP Plan Document”) (“The Employee Stock Ownership Plan (“ESOP”) established in the Plan effective January 1, 1989, shall consist of all the shares of Company Stock in the Plan at any time ...”); 2004 SSIP Plan Document, Article XV, § 15.1, Ford-ER00749; see also TESPHE Plan Document, as effective on *904 Oct. 9, 1999, attached to Compl. as Ex. I, Article XXVII, § 1, Ford-ER00489 (“1999 TESPHE Plan Document”) (“There was established in the Plan an Employee Stock Ownership Plan (“ESOP”) effective January 1, 1989”); 2003 TESPHE, Article XXVII, § 1, Ford-ER00047). Both the Hourly and Salaried Plan documents require the Plans to offer the Ford Stock Fund as an investment option (see, e.g., 2001 SSIP Plan Document, Article VIII, § 8.1(a), Ford-ER00793; 2004 SSIP Plan Document, Article VIII, § 8.1(a), Ford-ER00722; see also, 1999 TESPHE, Article XIII, § 1(a), Ford-ER00476; 2003 TESPHE, Article XIII, § 1(a), Ford-ER00029). All of the Plans fulfill the legal requirement of an ESOP to invest primarily in Company stock. Id. In 2006, both Plans required investments exclusively in Company stock (See 2006 SSIP Plan Document, Article VIII, § 8.1(a), Ford-ER00130; April 13, 2006, Amendments, Ford-ER00067-69). 6 The Plans are also eligible individual account plans (“EIAPs”), defined in ERISA as “individual account plants] which [are] (I) a profit-sharing, stock bonus, thrift, or savings plan; (ii) an employee stock ownership plan; or (iii) a money purchase plan which was in existence on the date of enactment of this Act and which on such date invested primarily in qualifying employer securities.” ERISA § 407(d)(3)(A); 29 U.S.C. § 1107(d)(3)(A). Here, all the Plans are employee savings plans with the option to invest in the Ford Stock Fund, which required investment primarily (and after April 13, 2006, exclusively) in Ford stock. All EIAPs, including but not limited to those that are also ESOPs, are subject to the exemption from ERISA’s diversification requirements. See ERISA § 404(a)(2); 29 U.S.C. § 1104(a)(2) (“In the case of an eligible individual account plan ... the diversification requirements of paragraph [404(A) ](1)(C) and the prudence requirement (only to the extent it requires diversification) of [404(A) ](1)(B) is not violated by acquisition or holding of ... qualifying employer securities[.]”). See also, Edgar v. Avaya, Inc., 503 F.3d 340, 347 (3rd Cir.2007) (“EIAPs, like ESOPs, ‘place employee retirement assets at much greater risk’ than traditional ERISA Plans. Given these similarities, we conclude that the underlying rationale of Moench applies equally here.”). The Sixth Circuit has endorsed the application of the presumption of prudence to EIAPs. See Landgraff v. Columbia/HCA Healthcare Corp., No 3-98-0090, 2000 WL 33726564, at *6 (M.D.Tenn. May 24, 2000) (applying Kuper presumption of prudence to EIAP), aff'd mem., 30 Fed.Appx. 366 (6th Cir.2002) 7 ; see also Wright v. Or. Metallurgical Corp., 360 F.3d 1090, 1097 (9th Cir.2004) (applying presumption of prudence to EIAPs). Plaintiffs contend that the Ford Stock Fund is not an ESOP or subject to the presumption of prudence because it is a component of the Plans that “offer but not *905 do not require investment in Ford stock” (Dkt.# 76, p. 12) (“the presumption [of prudence] does not apply to 401 (k) plans that offered, among other investment options, a company stock fund”). This is significant, according to Plaintiffs, because they read a temporal ownership requirement into the ERISA ESOP definition. Id. at 11 (“Thus the Plans are not designed to maintain employee ownership as contemplated by Congress ... [because they] allow[] a participant to make five sales or purchases monthly ... a policy that still was inconsistent with encouraging or maintaining employee ownership over the long-term.”) (emphasis in original). Yet, governing Internal Revenue Service regulations make clear that “[a]n ESOP may form a portion of a plan the balance of which includes a qualified pension, profit sharing or stock bonus plan which is not an ESOP.” Treas. Reg. § 54.4975-11(a)(5); see also Joint Committee on Taxation’s General Explanation of Tax Legislation Enacted in the 109th Congress, 552 (“An ESOP can be an entire plan or it can be a component of a larger defined contribution plan.”). Plaintiffs cite no authority for the supposed limitation that participants must be locked into their investment in employer stock and forced to “maintain” that investment, in order for the plan to constitute either an ESOP or an EIAP. Moreover, the frequency of participant transactions into and out of the Ford Stock Fund does not change the fact that whatever assets are in the Ford Stock Fund must have been primarily (and after April 2006 “exclusively”) invested in Ford stock (See, e.g., 2006 SSIP Plan Document, Article VIII, § 8.1(a), FordER00130 (“the Ford Stock Fund should be, and should continue to be invested exclusively in Company Stock”); 2003 TESPHE, Article XIII, § 1(a), Ford-ER00029 (“Investments shall be made primarily in shares of Company Stock ... ”)). Accordingly, it is proper to treat the Plans at issue as ESOPs. C. The ESOP Presumption of Reasonableness May Apply to a Motion to Dismiss Pursuant to Rule 12(b)(6) Based on Kuper, Ford argues that Plaintiffs must allege facts sufficient to overcome the “presumption of reasonableness.” Unlike the present case, however, Kuper went to trial in the district court, and therefore presented a fully developed record upon which to apply the presumption. Kuper, 66 F.3d at 1459. The Sixth Circuit has not ruled on how Kuper applies to a motion to dismiss. Plaintiffs cite a number of cases, including two from this district, supporting their argument that the presumption of reasonableness is an evidentiary issue which is inconsistent with the simple notice pleading requirement of Federal Rule of Civil Procedure 8(a), and therefore is not appropriate for consideration on a motion to dismiss. For example, in In re CMS Energy ERISA Litigation, 312 F.Supp.2d 898 (E.D.Mich.2004) (“CMS ERISA”), the court “note[d] its agreement that [the ESOP presumption of reasonableness] can be overcome by a showing that a prudent fiduciary would have made a different investment decision, and that this argument cannot carry a motion to dismiss made under Fed.R.Civ.P. 12(b)(6).” Id. at 914 n. 10 (internal citation omitted) (emphasis added). And in Rankin v. Rots, 278 F.Supp.2d 853 (E.D.Mich.2003), a case arising out of the Kmart bankruptcy, the court read Kuper as standing for two important propositions: First, the fact that the Plan requires investment in Kmart stock will not ipso facto relieve the [defendants] of their fiduciary obligations to prudently invest or to diversity. Second, whether or not they have breached their fiduciary *906 duties requires development of the facts of the case. The result of these two points is that [the plaintiff] has stated a claim against them; whether or not she will prevail is another matter to be determined later. Id. at 879. See also In re AEP ERISA Litig., 327 F.Supp.2d 812, 828 (S.D.Ohio 2004) (“it is neither necessary nor appropriate for the Court, at this juncture, to make a determination of whether the Plan or the Fund qualifies as an ESOP.”); In re Elec. Data Sys. Corp. "ERISA” Litig., 305 F.Supp.2d 658, 670 (E.D.Tex.2004) (“EDS ERISA”) (“requiring Plaintiffs to affirmatively plead facts overcoming the ESOP presumption violates Rule 8(a)’s notice pleading requirement”). 8 Ford, however, cites several cases in which other courts have granted motions to dismiss based on the presumption of reasonableness. In Wright v. Oregon Metallurgical Corp., 360 F.3d 1090 (9th Cir.2004), the Ninth Circuit held that the district court’s dismissal of the plaintiffs’ claim with prejudice was appropriate because the “alleged facts effectively preclude^] a claim ..., eliminating the need for further discovery.” Id. at 1098-99. The court noted that the materials attached to the complaint demonstrated that the company at issue “was far from the sort of deteriorating financial circumstances” of companies subject to similar actions, “and was, in fact, profitable and paying substantial dividends throughout [the class] period.” Id. at 1099 (comparing facts of Moench, 62 F.3d at 572). Similarly, in In re Duke Energy ERISA Litigation, 281 F.Supp.2d 786 (W.D.N.C.2003), the court followed the Ninth Circuit’s decision in Wright by finding that the plaintiffs had failed to “allege that Duke Energy was anything other than a viable, strong company with substantial assets. In fact, ... Duke Energy is a solid, viable company, far from ‘impending collapse,’ and not in ‘dire circumstances.’ ” Id. at 795. And in In re Calpine Corp. ERISA Litigation, 2005 U.S. Dist. LEXIS 9719, 2005 WL 1431506 (N.D.Cal. Mar. 31, 2005) (“Calpine ERISA”), the court held that based on the facts before it, the plaintiffs “have not and cannot allege facts that could rebut the presumption of prudence.” Id. at *17, 2005 WL 1431506, at *5. The Third Circuit, whose Moench decision articulating this presumption which the Kuper decision adopted, has applied the presumption of prudence in reviewing a Rule 12(b)(6) dismissal. See, Edgar v. Avaya, Inc., 503 F.3d 340 (3rd Cir.2007). It noted that a complaint alleging a stock drop from *907 $10.69 to $8.01 after the company announced it would not meet its previously announced earnings goals without more extreme plus factors as involved in Moench was subject to dismissal on the pleadings. Upon close inspection, most of the cases cited by Plaintiffs and by Ford can be reconciled. The importance of the cases cited by Ford is not that the plaintiffs did not allege facts sufficient to overcome the presumption of reasonableness, but that the plaintiffs alleged facts that clearly would not qualify. In effect, they pled themselves out of court, because the facts asserted in their complaints and the supporting documentation precluded relief by being clearly insufficient to require the defendant fiduciaries to disregard the terms of the respective ESOP plans or face being found to have abused their discretion. In considering what facts are sufficient to meet this standard, each case finding for the defendants was cognizant of the presumption of prudence that surrounded those defendants. Accordingly, if Plaintiffs allege facts that clearly preclude then- ability to overcome the presumption of prudence, the Court will dismiss the Complaint. But in closer cases where the allegations suggest that with future discovery there is a “ ‘reasonably founded hope’ that a plaintiff would be able to make a case,” Courts should not, in effect, apply Rule 56 standards to the complaint on a motion to dismiss. Thus, while the presumption of prudence is a factor in a motion to dismiss, Plaintiffs do not have an affirmative burden to plead the specific facts necessary to overcome the presumption. Yet, consistent with Rule 8(a)’s notice pleading requirement, they nonetheless have the duty to plead sufficient facts to demonstrate that they have a plausible ERISA claim in light of the presumption of prudence, and a “reasonably founded hope” that after discovery they will be able to rebut that presumption. In sum, Defendants are entitled to a presumption of reasonableness in this case. At this early stage of litigation, however, Plaintiffs’ burden is only to put Defendants on notice of a viable claim for relief, and they need not allege every specific fact that must be proven in furtherance of their claim. Count I shall be dismissed if, in light of the presumption of reasonableness, Plaintiffs’ alleged facts preclude relief. 1. Plaintiffs are not required to plead “impending” or “imminent collapse.” Defendants suggest that the Kuper presumption can only be overcome by pleading that they knew that Ford was facing “imminent collapse.” (Dkt.# 73, p. 20). As noted above, Defendants sought to write this standard into the Plans in 2006. Yet, several Sixth Circuit district courts have made clear that an ERISA fiduciary’s duty to divest a plan of company stock is not limited to circumstances where a company is facing imminent or impending collapse: The “impending collapse” language originates from the Moench decision itself. In Moench, the Third Circuit recognized that a fiduciary’s knowledge of impending collapse, coupled with his conflicted status, can constitute an abuse of discretion. 62 F.3d at 571-72. However, Moench involved a company that was, in fact, on the brink of financial collapse. Id. at 557. Nowhere in the opinion does the Third Circuit limit its holding to companies facing such dire circumstances. More importantly, the Sixth Circuit opinion adopting the Moench presumption, has a much broader holding: “[a] plaintiff may then rebut this presumption of reasonableness by showing that a prudent fiduciary acting under similar circumstances would have made a different investment decision.” Ku-per, 66 F.3d at 1459. Nowhere in the *908 opinion does the Sixth Circuit use the words “impending collapse.” In re Ferro Corp. Erisa Litig., 422 F.Supp.2d 850, 860-61 (N.D.Ohio 2006) (emphasis added). 9 As in the multitude of cases cited above, Defendants’ impending collapse argument must be rejected here. The standard simply makes no sense in a case like this and its application would result in needless and avoidable waste of participants’ retirement savings. ERISA’s duties of prudence and loyalty are the “highest known to the law.” CMS, 312 F.Supp.2d at 905 (internal quotes & citations omitted). Lowering the prudence bar to the point that a fiduciary is required to sell company stock only after it has become worthless is impossible to square with ERISA’s stated mission of “establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and ... providing for appropriate remedies, sanctions, and ready access to the Federal courts.” ERISA § 2(b), 29 U.S.C. § 1001(b). Such a standard is akin to requiring monitoring of a patient only after he is dead. See, Summers v. State St. Bank & Trust Co., 453 F.3d 404, 411 (7th Cir.2006), cert. denied 549 U.S. 1245, 127 S.Ct. 1249, 167 L.Ed.2d 144 (2007) (“selling when bankruptcy is declared will almost certainly be too late”). 2. Plaintiffs are not required to plead fraud. Defendants argue that this case must be dismissed at the pleading stage because the Complaint does not allege “fraud or similar corporate malfeasance.” (Dkt.# 73, p. 22). There are several problems with this argument. First, the Complaint alleges abundant corporate malfeasance and mismanagement, including among other things that (1) in November 2006 Ford restated five years of financial statements (substantially all of its financial reporting during the Class Period) 10 and remains under investigation by the Securities and Exchange Commission (Comply 127); (2) Ford effectuated the improper and erroneous Visteon spin-off (Compl. ¶¶ 130-38); (3) Ford has vastly under-funded its pension plans and health care liability (CompLIffl 139-46); (4) Ford exaggerated its cash position by five to ten billion dollars (Comply 158) and; (5) Ford has been in the aggregate seriously mismanaged to the point that the company is in dire financial circumstances (CompLIffl 148-69). Second, Kuper, the controlling case on this question, does not hold that Plaintiffs must allege fraud. 11 The Sixth Circuit, affirming summary judgment for defen *909 dants, held that the fiduciaries’ presumption of prudence was not overcome by allegations that they failed to consider diversifying or liquidating company stock in an ESOP, because plaintiffs, alleging merely that defendants were unreasonable because they were “aware of events that would continue to cause [company stock] to decline in value,” failed to “show a causal link between the failure to investigate the events and the harm suffered by the plan.” Kuper, 66 F.3d at 1459, 1460. The alleged events were a recapitalization that adversely affected the company’s leverage, “decreased operational diversity, a major fire at [a] plant ... and a decline in [the company’s] net sales and income.” Id. at 1451. The lesson of Kuper is that Plaintiffs must allege and eventually present evidence that a prudent fiduciary would have made a different investment decision. Id. at 1459. No doubt adducing evidence of fraud or corporate non-disclosure or misrepresentation is one way to satisfy the rebuttal standard of Kuper. 12 , Showing an “impending collapse” of the company’s stock is another. Moench, 62 F.3d at 572 (reversing summary judgment for defendants, noting that further development of the factual record could support rebuttal of the presumption of reasonableness where the plaintiff beneficiaries alleged a “precipitous decline” of company stock, conflict of interest among the fiduciaries and the fiduciaries’ knowledge of “impending collapse” of the stock). But nothing in Kuper rules out the possibility of demonstrating imprudence by showing that the stock has become excessively risky as a result of massive mismanagement; overwhelming debt and liabilities; conflicted, self-serving and disloyal fiduciaries; and the very real possibility that a company’s fortunes are so diminished that it is at risk of collapse. As Judge Posner held, such circumstances state a claim under ERISA. Cf. Summers, 453 F.3d at 410-11 (“ ‘even if the trustees did not predict the company’s “impending collapse” they might be required in the interest of the participants either to diversify the plan’s stockholdings or to exchange the ... stock for Treasury bills.’ ”) (quoting Steinman v. Hicks, 352 F.3d 1101, 1106 (7th Cir.2003)). 13 The *910 duty of prudence under ERISA, whether applied to company stock, or any other investment, is stated to be an objective standard. The inquiry is what a prudent person would do under similar circumstances. 14 Kuper, 66 F.3d at 1458. Plaintiffs are entitled to present evidence in this case that a reasonable fiduciary would not have acted similarly to the manner in which the Ford fiduciaries acted, regardless of their not making allegations of fraud or the impending threat of bankruptcy. *911 Finally, Defendants overstate the cases that they rely on for the proposition that fraud must be alleged. The district court in Stein v. Smith, 270 F.Supp.2d 157, 166 (D.Mass.2003), did not hold that pleading fraud is required and noted specifically that “the many pages of factual recitations relating to financial chicanery lend no necessary weight to a claim for breach of fiduciary duty.” While holding that an allegation that Textron “artificially inflated its stock price” was sufficient to defeat a motion to dismiss, the First Circuit in Lalonde v. Textron, Inc., 369 F.3d 1 (1st Cir.2004), was careful to note that it was not creating a “hard-and-fast rule”: Because the important and complex area of law implicated by plaintiffs’ claims is neither mature nor uniform, ... We believe that we would run a very high risk of error were we to lay down a hard-and-fast rule (or to endorse the district court’s rule) based only on the statute’s text and history, the sparse pleadings, and the few and discordant judicial decisions discussing the issue we face. Under the circumstances, further record development — and particularly input from those with expertise in the arcane area of the law where ERISA’s ESOP provisions intersect with its fiduciary duty requirements — seems to us essential to a reasoned elaboration of that which constitutes a breach of fiduciary duty in this context. Id. at 6-7 (emphasis added). Ward, Wright and Edgar were simply factually thin cases. In Ward v. Avaya, Inc., 487 F.Supp.2d 467, 479-80 (D.N.J.2007), the court dismissed the complaint because the plaintiffs only alleged operational losses, employee layoffs and a fall in stock price. In Wright, as noted above, “[the company] was, in fact, profitable and paying substantial dividends throughout that period.” Wright, 360 F.3d at 1099. Defendants’ most aggressive posture is holding forth DiFelice v. U.S. Airways, Inc., 436 F.Supp.2d 756, 786 (E.D.Va.2006) (“DiFelice II”), as requiring pleading fraud here. They overlook the procedural subtlety that DiFelice II was a judgment following trial, and that summary judgment was denied in DiFelice I notwithstanding that the complaint did not allege “fraud or concealment by a fiduciary or that the fiduciary possessed crucial information not publicly available.” DiFelice I, 397 F.Supp.2d at 773. The court in DiFelice I held that plaintiffs’ allegations, which largely concerned the alleged dire financial circumstances faced by U.S. Airways, were “sufficient to allow a jury to question the prudence of the decision to continue to allow the Plan to invest in U.S. Air Group stock.” Id. at 774. Accordingly, on summary judgment, the court declined to resolve the thorny factual dispute over whether U.S. Airways fulfilled its fiduciary duty to act prudently in selecting and managing its company stock fund as an ERISA plan investment. Id. at 775. Resolution of this same issue at the pleading stage without any evidentiary record, as Defendants urge here, would be inappropriate. Wisconsin Professors John Kaminski and Richard Leffler in a Federal Judicial Center presentation to judges in the Eastern District of Michigan recounted a history professor asking his class “what was the cause of the American Revolution?” The young cleric called upon paused a moment and then responded “one damned thing after another.” Professors Kaminski and Leffler thereafter demonstrated in their presentation the accuracy of that response. While the territory of potential liability for ESOP fiduciaries is still largely uncharted, short of pleading fraud or imminent collapse of a company, it must be acknowledged that when the facts are sufficient, the presumption of prudence can be rebutted by a showing a constellation of “one *912 damned thing after another.” Plaintiffs are seeking to present such a ease. D. Plaintiffs’ Alleged Facts Are Sufficient To Justify Denying Defendants’ Motion To Dismiss Plaintiffs’ primary allegation, which recurs throughout the Complaint in various contexts, is that Defendants ignored serious red flags that should have alerted them to the fact that Ford stock was not a prudent investment for the Plans. To be sure, this language suggests a theory based on general ERISA-imposed fiduciary duties, rather than the duties specific to ESOPs. But this alone does not necessarily preclude recovery. The Court must determine whether the facts alleged in the Complaint and in the referenced documents are inconsistent with a finding in Plaintiffs’ favor. An analysis of the facts that Plaintiffs will eventually need to prove begins with Kuper, in which the defendant’s stock declined from more than $50 per share to about $10 per share in an eighteen-month period. The court noted that the “plaintiffs merely assert[ed] that defendants’ decision to continue to hold [company] stock was unreasonable because defendants were aware of events that would continue to cause [a] decline in value.” Kuper, 66 F.3d at 1460. The court found that because “a prudent fiduciary acting under similar circumstances” would not necessarily have acted differently, this conduct alone was insufficient to overcome the presumption of reasonableness. Id. at 1459. In Wright, the Ninth Circuit echoed this reasoning, stating that “[m]ere stock fluctuations, even those that trend downward significantly, are insufficient to establish the requisite imprudence to rebut the [ESOP] presumption.” Wright, 360 F.3d at 1099. In a footnote, the court distinguished cases reaching the opposite result, including one from this district: Plaintiffs point to two decisions that are allegedly counter to this analysis, Stein v. Smith, 270 F.Supp.2d 157 (D.Mass.2003), and Rankin v. Rots, 278 F.Supp.2d 853 (E.D.Mich.2003). Although in both cases the courts ... denied 12(b)(6) motions to dismiss, each case is readily distinguishable. In Smith, the complaint specifically alleged that the company’s “financial collapse,” including “an accumulation of large, undisclosed losses on major projects as well as an impending liquidity crisis that was not adequately disclosed to the public,” played a pivotal role in the administrators’ breach of their fiduciary duties. 270 F.Supp.2d at 164. Moreover, the complaint alleged that “defendant Smith was integrally involved in making decisions about bidding and disclosure of S & W’s finances, and that the other defendants either were aware or should have been aware of the mounting problems.” Id. Unlike the present case ..., in which the only allegations involved downward fluctuations in stock price, the allegations in Smith clearly implicated the company’s viability as an ongoing concern. Similarly, in Rankin, the company at issue (Kmart), went bankrupt. The complaint specifically alleged that the plan administrators “failed to give Plan participants accurate, complete, non-misleading and adequate information about the compositions of the Plans’ portfolios and accurate information about Kmart and its true financial condition.” Rankin, 278 F.Supp.2d at 863. Wright, 360 F.3d at 1099, n. 5. Another case adds to this analysis. In Lalonde v. Textron, Inc., 270 F.Supp.2d 272 (D.R.I.2003), a federal district court held, in an often-cited opinion, that the presumption of reasonableness “may be overcome when a precipitous decline in the employer’s stock is combined with evidence that the company is on the brink of *913 collapse or is undergoing serious mismanagement.” Id. at 280. Applying this standard, the district court found that the plaintiffs had failed to overcome the presumption, because “at no time was Textron stock unsuitable for investment.” Id. When Textron reached the First Circuit, it was vacated in part. Lalonde v. Textron, Inc., 369 F.3d 1, 7-8 (1st Cir.2004). The appellate court did not disagree with the district court’s articulation of the applicable standard, but took issue with the finding that the plaintiffs had failed to meet their burden under Rule 12(b)(6): [T]he district court’s analysis, while perhaps convincing on its own terms, failed to take account of plaintiffs’ allegation that, during the period identified in the complaint, Textron artificially inflated its stock price by concealing “the disparate problems throughout Textron’s segments and their adverse effect on Tex-tron which are the subject of a federal securities lawsuit by shareholders against Textron and certain of its officers and directors.” While this allegation is not terribly specific, Textron surely is aware of the nature of the charges it faces in the separate lawsuit. The allegation is thus sufficient to play its part in effectuating the purposes of Fed.R.Civ.P. 8(a): to give Textron “fair notice of what [the plaintiffs’] claim is and the grounds upon which it rests.” And, when combined with the other allegations, it is sufficient to clear the Rule 12(b)(6) hurdle.... The odds of plaintiffs succeeding on their breach of fiduciary duty claims against the Textron defendants might be very long, but “that is not the test.” Id. at 6-7 (internal citations omitted). These authorities provide a map for the evidence that Plaintiffs will eventually need to produce in furtherance of their claim. It will not be enough for Plaintiffs to prove that Ford stock was an unwise investment or that Defendants ignored a decline in stock price. Rather, to overcome the presumption of reasonableness, Plaintiffs must show that the circumstances would have prompted a reasonable fiduciary in the same ESOP circumstances to make different investment decisions. Specifically, Plaintiffs must prove that Defendants were aware of facts showing that Ford’s “viability as an ongoing concern” was in jeopardy. Or, as articulated in the district court opinion in Textron, Plaintiffs must show “a precipitous decline in the employer’s stock ... combined with evidence that the company is on the brink of collapse or is undergoing serious mismanagement.” Textron, 270 F.Supp.2d at 280. Here, Plaintiffs plead substantial bases for establishing that Ford stock became an imprudent investment option for participants’ retirement savings during the Class Period. In particular, the Complaint alleges (1) a precipitous stock price decline from over $30 to under $7 during the Class Period; 15 (2) serious, if not gross, mismanagement evidenced by, among other things, (a) management’s failure to control Ford’s liabilities and other obligations in respect of current and future retirees; (b) management’s failure to design and manufacture products that are competitive in the marketplace; and (c) management’s incurring of at least $1.1 billion in extra, *914 unanticipated charges as a result of its determination to reassume the payroll, retirement and other liabilities of Visteon, five years after it spun the operation off, ostensibly to avoid those liabilities; and (3) Ford’s being on the brink of collapse, as evidenced by (a) the steady, inexorable decline in Ford’s credit ratings; (b) the steady, inexorable decline in Ford’s Altman Z-Score; (c) the steady climb of Ford’s debt-equity ratio and the escalation to undue levels of the risks of continuing to invest in Ford stock; and (d) the mortgaging of every last asset of Ford, including its Blue Oval logo, to convince lenders to give Ford enough cash to continue operations (CompU 214). Based on these circumstances, the Complaint alleges that “there is a serious question as to Ford’s viability ....” Id. at ¶ 5. Each of these allegations is supported by detailed factual information set forth in the Complaint. Id. at ¶¶ 100-179. Furthermore, the Complaint alleges that Defendants ignored the abundant financial warning signs; failed to conduct an appropriate investigation into whether Ford stock remained a prudent investment for the Plans, which may have revealed to a reasonable fiduciary that it was not; and failed to provide participants with adequate information regarding Ford’s problems so that participants could make informed decisions regarding their investments in Ford stock in the Plans (Compl.M 170, 173-74, 241). Plaintiffs also plead bases for the conclusion that Defendants breached their duty of loyalty to the beneficiaries of the Plans by amending the Plans in self-serving ways that provided no benefit to the Plans’ beneficiaries (Compl.lffl 191-197). 16 At the March 4, 2008, hearing, Plaintiffs further argued their case by providing an extensive PowerPoint presentation to which Defendants responded on March 12, 2008 (Dkt.#84). 17 In that presentation, Plaintiffs further highlighted a number of signs that might have suggested to a reasonable fiduciary at some point during the *915 Class Period that Ford was in serious financial trouble and that its stock was an unsuitable investment for the Plans. Those signs include the following: 1. Ford’s credit rating was significantly downgraded during the Class Period from A2 (“upper-medium grade ... subject to low credit risk”) on April 4, 2000 to Caal (“of poor standing ... subject to very high credit risk”) on February 29, 2008. Source: Bloom-berg L.P.; Moody’s Rating Symbols & Definitions, Aug. 2003, at 8. 2. Wall Street Analysts’ downgraded Ford stock 44 times during the Class Period through March 3, 2008. Source: Yahoo! Finance, March 3, 2008. 3. Ford experienced a 200% increase in its debt-equity ratio from 3.85x on December 31, 2000, to 11.41x on December 31, 2007. Source: Bloomberg L.P. 4. Ford terminated its dividend payments during the Class Period. Source: Bloomberg L.P. 5. Ford experienced a 34% decline in its U.S. market share from 23.7% (car & truck) in 2000 to 15.6% (car & truck) in 2007. Source: Ford Motor Company, Annual Report (Form 10-K), Dec. 31, 2007; Ford Motor Company, Annual Report (Form 10-K), Dec. 31, 2004. 6. Ford decreased its workforce by 33% from 364,550 employees on December 31, 1999, to 246,000 employees on December 31, 2007. Source: Ford Motor Company, Annual Report (Form 10-K), Dec. 31, 2007; Bloom-berg L.P. 7. Ford suffered a 82% decline in shareholders’ equity from $28.3 billion on December 31, 1999, to $5.0 billion on December 31, 2007. Source: Bloomberg L.P. 8. Ford stock underwent a 93% decline in book value from $22.44 per share on December 31, 1999, to $1.64 per share on December 31, 2007. Source: Bloomberg L.P. 9. Ford suffered a 138% decline in its net income from $7.2 billion in 1999 to negative $2.7 billion in 2007. Source: Bloomberg L.P. 10. Alan Mulally, Chief Executive Officer & President of Ford Motor Company, summarized the parlous objective financial information about the Company during the Class Period by declaring: “The data say we’re going out of business.” Source: Compl. ¶ 155 (citing George F. Will, Ford Tries to Outrace the Repo Man, WASH. POST, December 24, 2006, at B7). Defendants are correct that these are largely not facts asserted in the Complaint, and may only be appropriately considered at a later stage, if at all, unless the Complaint is amended again. Yet, they are data that when coupled with all the facts and allegations contained in Plaintiffs 95 page, 293 paragraph Complaint support a conclusion that Plaintiffs have a “reasonably founded hope” that with further discovery they can make out a case sufficient to rebut the presumption of prudence. The series of economically troubling data asserted in the Complaint and the assertions of mismanagement in this case distinguish it from those cases where at the Rule 12(b) (6) stage the plaintiffs pled themselves out of court. The Complaint must be read in the light most favorable to the Plaintiffs and as such, it is a Complaint that cannot be dismissed on Defendants’ motion to dismiss. This is not to say that Plaintiffs will prevail in carrying their very heavy burden at later stages of this litigation, but merely that they *916 should be afforded an opportunity to proceed beyond the pleading stage. Moreover, denial of Defendants’ motion is consistent with the actions taken by other courts in the Sixth Circuit that have uniformly denied motions to dismiss in company stock cases. In the Eastern District of Michigan, these cases include: 1. In re General Motors ERISA Litig., No. 05-71085, 2006 WL 897444 (E.D.Mich. Apr.6, 2006) (Edmunds, J.), denying a motion to dismiss even when: (1) “throughout the six-year class period General Motors had been a solvent and profitable business enterprise” Id. at *11; (2) even when assets increased; (3) even when stockholders’ equity increased and; (4) even when General Motors never failed to pay dividend. 2. Sherrill v. Fed.-Mogul Corp. Ret. Programs Comm., 413 F.Supp.2d 842 (E.D.Mich.2006) (Cohn, J.), denying a motion to dismiss even when no allegations of fraud. Id. at 853-56. 3. In re CMS Energy ERISA Litig., 312 F.Supp.2d 898 (E.D.Mich.2004) (Steeh, J.), denying a motion to dismiss even where breach of fiduciary duty claims do not sound in fraud. Id. at 909. And holding that while “certain exemptions exist in the law for ESOPs under ERISA ... a fiduciary retains the general responsibilities set forth in [29 U.S.C. § 1104].” Id. at 914. 4. Rankin v. Rots, 278 F.Supp.2d 853 (E.D.Mich.2003) (Cohn, J.), denying a motion to dismiss even where ERISA breach of fiduciary duty claims do not sound in fraud. Id. at 865-66. Outside the Eastern District of Michigan, and throughout the Sixth Circuit, other courts have also reached a similar result. Some of these cases include: 1. In re Goodyear Tire & Rubber Co. ERISA Litig., 438 F.Supp.2d 783 (N.D.Ohio 2006), denying a motion to dismiss and finding that “Plaintiffs need not pled that Goodyear was on the brink of an impending collapse ...” Id. at 794. 2. In re Cardinal Health, Inc. ERISA Litig., 424 F.Supp.2d 1002 (S.D.Ohio 2006), denying a motion to dismiss and adopting In re AEP holding that “requiring Plaintiffs to affirmatively pled facts overcoming the ESOP presumption violates Rule 8(a)’s notice pleading requirement.” Id. at 1033. 3. In re Ferro Corp. Erisa Litig., 422 F.Supp.2d 850 (N.D.Ohio 2006), denying a motion to dismiss and stating that Kuper does not require pleading “impending collapse.” “Nowhere in the [Moench ] opinion does the Third Circuit limit its holding to companies facing such dire circumstances.” Id. at 860. 4. In re AEP ERISA Litig., 327 F.Supp.2d 812 (S.D.Ohio 2004), denying a motion to dismiss and finding that “[Presumptions are eviden-tiary standards that should not be applied to motions to dismiss.” Id. at 829. 5. Shirk v. Fifth Third Bancorp., No. 05-49, 2007 WL 1100429 (S.D.Ohio Apr.10, 2007), denying a motion to dismiss and finding that “[i]t is inappropriate on a motion to dismiss to make a factual finding as to whether the Plan qualifies as an ESOP.” Id. at *9. Defendants counter that it was the set-tlor’s intent to maintain the Plans’ investment in Ford stock throughout the Class Period (Dkt.# 73, p. 14). Accordingly, they argue that Plaintiffs cannot overcome the presumption of prudence that Defendants claim applies in this case, regardless *917 of the financial condition of Ford. Id. at *15. There are several problems with this argument. First, while Defendants aver it is the “settlor’s intent” that the Ford Stock Fund in both Plans (1) was designed to invest “exclusively in Company stock,” (2) was designed to be a “permanent feature of the Plan” unless and until “there is a serious question concerning the Company’s short term viability as a going concern,” and (3) “should be, and should continue to be invested exclusively in Company Stock ... without regard to ... the diversification of assets ...,” this language did not exist before 2006 — six years into the Class Period (Dkt. #73, pgs. 5, 12, 14; Compl. ¶ 195). Before 2006 the Ford Stock Funds (but not the 401 (k) Plans in toto) were designed to invest “primarily” in Ford stock and did not contain any references to the ‘permanence’ of the Ford Stock Fund feature or the circumstances under which Ford stock should be sold by Defendants (Compl.1ffl 30, 40). These changes were added in May 2006 — after the Plans already had lost billions of dollars on their investment in Ford stock. Defendants refrain that it was “settlor intent” to require exclusive investment in Ford stock throughout the Class Period, is not accurate. Second, Moench notes that in overcoming the presumption of prudence, a plaintiff must show “that the ERISA fiduciary could not have believed reasonably that continued adherence to the ESOP’s direction was in keeping with the settlor’s expectations of how a prudent trustee would operate.” Moench, 62 F.3d at 571. This was not an invitation for unscrupulous fiduciaries — fearing liability for damage already done- — to rewrite plans to make it more difficult for participants to recover the plans’ losses. Rather, the point was to balance in general terms the competing ESOP concepts of employee ownership on the one hand — the settlor intent at issue— and prudent management of retirement savings on the other. Defendants cannot undermine the need for this careful balancing through self-serving, post facto amendments. Third, even if, as Defendants seek to portray it, the Plans’ settlor intended throughout the Class Period for the Plans to be invested exclusively in Ford stock until Ford’s “short term viability as a going concern” is called into question, i.e., bankruptcy is imminent, it is not clear that this standard meets the duty of prudence required under ERISA. Hence, the expression of purported settlor intent must be disregarded when it conflicts with ERISA’s dictates. Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 568, 105 S.Ct. 2833, 86 L.Ed.2d 447 (1985) (“trust documents cannot excuse trustees from their duties under ERISA”); Best v. Cyrus, 310 F.3d 932, 935 (6th Cir.2002) (holding trustee not limited to duties described in plan document, but must carry out ERISA fiduciary duties). A directed trustee is to follow proper directions, and certain directions can fail to qualify as proper. Summers, 453 F.3d at 406. The Sixth Circuit seems to share this view in Kuper, 66 F.3d at 1457 (rejecting argument that defendants could not be liable for investing in company stock because terms of plan required such investment). 18 *918 In short, the notion that Defendants could manage the investments of the Plans imprudently and disloyally because “the settlor wanted them to,” (Dkt.# 73, p. 15) is contrary to the Defendants’ fiduciary duty under ERISA, and in particular their duty to disregard provisions of the Plans that would lead to an imprudent result. ERISA would be a dead letter if fiduciaries could simply replace the actual standards imposed by ERISA with a less onerous one of their own making. See, Kuper, 66 F.3d at 1457. In this case Plaintiffs’ allegations are sufficiently particular and concrete to avoid a need for the type or speculation or inference from an absence of any fact that was the concern of the Supreme Court in Twombly. Twombly, 127 S.Ct. at 1961. 19 Reading the extensive allegations in Plaintiffs’ Complaint in a light favorable to them, they make plausible assertions that they are entitled to relief. 20 E. Counts II And III Should Be Sustained. Defendants’ arguments for dismissing Counts II and III are based on their assertion that the underlying imprudence claim of Count I is not viable. For the reasons set forth above, Defendants are incorrect about the underlying imprudence claim. Accordingly, Defendants’ motion to dismiss Counts II and III should be denied as well. The breach of the duty to monitor claim is asserted against Ford, the VP Defendants and the Doe Defendants (the “Monitoring Defendants”). Because these Defendants had the authority to appoint, remove and monitor other Defendants (ComplJ 256), Plaintiffs argue they had a duty to monitor them. AEP, 327 F.Supp.2d at 832-33. The Complaint sets forth specific obligations of appointing fiduciaries *919 (Compl-¶¶ 256-59), describes how these obligations were breached (Comply 260), and alleges that the Plans were damaged thereby (Comply 261). These allegations are adequate to state a claim for breach of the fiduciary duty to monitor. See AEP, 327 F.Supp.2d at 832-33. Plaintiffs have also alleged co-fiduciary liability. Co-fiduciary liability is governed by ERISA § 405(a), 29 U.S.C. § 1105(a), which imposes liability for “(1) a fiduciary’s participation in, or concealment of, breaches of fiduciary duty by another fiduciary, (2) a fiduciary’s enabling another fiduciary to commit a breach, or (3) a fiduciary’s having knowledge of a breach by another fiduciary, and failing to take reasonable steps to remedy that breach.” Here, Plaintiffs have pled that Defendants violated all three prongs of ERISA § 405(a) because (1) they knew of Ford’s failures and alleged inappropriate business practices, and of breaches by other fiduciaries, but took no action to remedy those breaches (CompLIHI 267-69); (2) with knowledge of breaches by Ford, the YP Defendants, the Executive Officer Defendants, and IPC Defendants and the IPOC Defendants (the “Prudence Defendants”), the Monitoring Defendants ignored their oversight responsibilities and thereby knowingly participated in the breaches (Comply 270) and; (3) by not monitoring or taking other appropriate steps with respect to the Prudence Defendants, the Monitoring Defendants enabled the Prudence Defendants’ breach of duty (Comphlffl 271-72). Such allegations are sufficient to meet the Rule 8 pleading standards. See AEP, 327 F.Supp.2d at 833; CMS, 312 F.Supp.2d at 910-11. While Defendants may ultimately be able to prevail because the Plaintiffs fail to rebut the presumption of prudence to which Defendants are entitled, the Complaint alleges sufficient facts against the “Monitoring Defendants” and the “Prudence Defendants” for the Plaintiffs to proceed. See Harzewski v. Guidant Corp., 489 F.3d 799, 807 (7th Cir.2007) (reversing district court’s dismissal because plaintiffs had no opportunity to establish when fiduciary should have sold company stock from ERISA plan); Keach v. U.S. Trust Co., 240 F.Supp.2d 840, 845 (C.D.Ill.2002) (“When viewing the facts in the light most favorable to the Plaintiffs, as the Court must at this stage of the litigation, a reasonable fact finder could conclude that following the precipitous drop in the value of the ESOP’s assets in 1998, the [defendants] buried their heads in the sand and failed to take appropriate action to seek redress to recoup the loss or otherwise protect the remaining plan assets and, by virtue of this failure, fell below the standard of care required of ERISA fiduciaries.”). Defendants fail to present any legitimate basis for denying Plaintiffs the opportunity to seek to discover and to present the evidence necessary to prove their factual allegations in this case. Accordingly, their motion to dismiss should be denied. IV. Recommendation For the reasons indicated above, it is recommended that Defendants’ motion be denied. The parties to this action may object to and seek review of this Report and Recommendation, but are required to file any objections within ten (10) days of service of a copy hereof as provided for in 28 U.S.C. § 636(b)(1) and E.D. Mich. LR 72.1(d)(2). Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Howard v. Sec’y of Health and Human Servs., 932 F.2d 505 (6th Cir.1991); United States v. Walters, 638 F.2d 947 (6th Cir.1981). Filing of objections which raise some issues but fail to raise others with specificity, will not preserve all the objec *920 tions a party might have to this Report and Recommendation. Willis v. Sec’y of Health and Human Sews., 931 F.2d 390, 401 (6th Cir.1991); Smith v. Detroit Fed’n of Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir.1987). Pursuant to E.D. Mich. LR 72.1(d)(2), a copy of any objections is to be served upon this Magistrate Judge. Within ten (10) days of service of any objecting party’s timely filed objections, the opposing party may file a response. The response shall be not more than twenty (20) pages in length unless by motion and order such page limit is extended by the Court. The response shall address specifically, and in the same order raised, each issue contained within the objections. March 31, 2008. Footnotes [1] This standard is consistent with Magistrate Judge Pepe’s conclusion (to which neither side has objected) that the Kuper presumption is not a mere evidentiary standard, but instead is a substantive rule of law that can be applied at the motion-to-dismiss stage. It is also at least partially consonant with the Fifth Circuit's approach in Kirschbaum v. Reliant Energy, 526 F.3d 243, 249 (5th Cir.2008). There, the court rejected one of the plaintiff’s claims because it asserted not "that REI common stock was an imprudent investment per se, but rather that it was too risky for the Plan to hold in large quantities." But the court accepted another count, which “allege[d] it was imprudent for the Plan to hold even one share of REI stock.” Id. This case is not identical to Kirschbaum in every respect, because there the riskiness of the company stock was alleged to arise in part from fraudulent activity. As explained previously, however, the Court does not see this distinction as a crucial one. The Kirschbaum court also stated that the presumption of prudence “may only be rebutted if unforeseen circumstances would defeat or substantially impair the accomplishment of the trust's purposes.” Id. at 256. In the Court's view, unforeseen circumstances may be relevant to the prudence inquiry, but are not necessary for an EIAP fiduciary to be liable for a violation of the duty of prudence. [2] Ford correctly notes that the magistrate apparently considered facts not contained in the complaint in reaching this conclusion. Id. p. 915. But the language quoted above indicates that Judge Pepe regarded the pleadings alone to also be sufficient. The Court's adoption of the R & R is predicated on this understanding. [3] This letter also requested certain discovery from Ford. If the matter remains unresolved, the plaintiffs should re-assert this request as a full-fledged motion. [1] Although not applicable to the named Plaintiffs, Ford also maintains a primary defined contribution retirement plan-the Ford Retirement Plan-for Ford employees hired or rehired on or after January 1, 2004 (See Ford Motor Company, Annual Report, Form 10K, Note 23 (filed March 1, 2006), available at http://www.sec.gov/edgar/searchedgar/ companysearch.html (file number 001-03950)). [2] From 1999 to 2001 and from 2004 to 2005, Ford made matching contributions to SSIP Plan participants' accounts in Ford stock through the Ford Stock Fund. Originally, participants were prevented from transferring matching contributions from the Ford Stock Fund to other investment options in the SSIP. This restriction was removed when matching was reinstated in 2004 (Compl.Hi 25-35). [3] From June 1, 2000, to December 1, 2004, Plan participants were limited to five transfers per month into or out of the Ford Stock Fund (See 2006 SSIP Plan Document, Article IV, § 4.2(a), Ford-ER00109; 2006 Amendments to TESPHE, attached to Compl. as Ex. E, Ford-ER00071). [4] See 2007 SSIP Summary Plan Description, Ford-ER00943, Dkt. # 73, Ex. A (“The Plan is intended to constitute a plan as described in Section 404(c) of the Employee Retirement Income Security Act (ERISA) of 1974, as amended, and Title 29 of the Code of Federal Regulations Section 2550.404c-l, and the fiduciaries of the Plan may be relieved of the liability of any losses which are the direct and necessary result of investment instructions given by a participant or beneficiary.”); 2004 TESPHE Summary Plan Description, Ford-ER00244, Dkt. # 73, Ex. B (“The TESPHE is intended to constitute a plan described in section 404(c) of ERISA. The fiduciaries of the TESPHE are relieved of inability for any losses which are the direct and necessary result of investment instructions given by members of the TESPHE.”). [5] But see Shirk v. Fifth Third Bancorp, No. 05-49, 2007 WL 1100429 (S.D.Ohio Apr.10, 2007) (“Where the plaintiffs are alleging a breach of fiduciary duty based not only on failure to diversify but also because a company’s stock was itself an imprudent investment, 'it is neither necessary nor appropriate’ for the Court to determine whether a plan qualifies as an ESOP on a motion to dismiss.” (citation omitted)). [6] Prior to 2006, the language referring to the Ford Stock Fund and the Plans' status as ESOPs were contained in separate sections of each Plans’ Documents. In 2006, both Plans merged the language in these separate sections and state: “It is the Company's intent that to the fullest extent permitted by ERISA, that the Ford Stock Fund be a permanent feature of the Plan and that it shall qualify as an employee stock ownership plan under Section 407(d)(6) of ERISA ...” (See 2006 SSIP Plan Document, Article VIII, § 8.1(a), Ford-ER00130; April 13, 2006, Amendments, Ford-ER00067-69). [7] The Landgraff case in the preceding paragraph used the term "presumption of reasonableness” in referring to an ESOP. The terms seem to be interchangeable, with Kuper using "presumption of reasonableness,” Kuper, 66 F.3d at 1458, and the Third Circuit referring to “Moench’s presumption of prudence.” Edgar, 503 F.3d. at 347. [8] In EDS ERISA, the district court rested its holding on Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002), a case in which the U.S. Supreme Court held that in a Title VII discrimination case, a plaintiff need not plead facts sufficient to establish a prima facie case under the McDonnell Douglas evidentiary framework. The Supreme Court had reasoned in part that the McDonnell Douglas framework does not apply to all Title VII cases, but only where a plaintiff can present no direct evidence of discrimination. Id. at 511-12, 122 S.Ct. 992. Thus, at the pleading stage, a plaintiff still has two possible theories. The district court in EDS ERISA applied this reasoning to the ESOP presumption of reasonableness context, finding that it would be similarly inappropriate to determine at the pleading stage which of two alternate theories — the Plan is an ESOP, or it is not — the facts would ultimately support. EDS ERISA, 305 F.Supp.2d at 670. Necessary to the court's holding, however, was its initial decision not to resolve whether the plans at issue were ESOPs. Id. This Court does not disagree with the reasoning of EDS ERISA, and if Plaintiffs had given the Court any reason to doubt that the Plans are indeed ESOPs, the Court would be inclined to follow that case. But given that this Court has already held that the Plans are ESOPs as a matter of law, and that Plaintiffs therefore have no alternative but to overcome the presumption of reasonableness, Swierkiewicz does not further Plaintiffs' argument. [9] Accord, e.g., Goodyear, 438 F.Supp.2d at 794 (holding that “Kuper has a much broader holding and never uses the words 'impending collapse'"); In re Cardinal Health, Inc. ERISA Litig., 424 F.Supp.2d 1002, 1032-33 (S.D.Ohio 2006) (holding that an ERISA fiduciary could be found imprudent where company stock "was — itself—an imprudent investment” or plan fiduciaries "knew, or had reason to know, that [the company] faced troubles that were certain to cause a decline in the value of its stock”); In re Sprint Corp. ERISA Litig., 388 F.Supp.2d 1207, 1224-25 (D.Kan.2004) (same and noting as well that impending collapse in Moench refers to the collapse of the stock price not the company itself); In re Honeywell Int’l Erisa Litig., No. 03-1214, 2004 WL 3245931, at *11 (D.N.J. Sept. 14, 2004) (same); In re ADC Telecomms., Inc., No. 03-2989, 2004 WL 1683144, at *6 (D.Minn. July 26, 2004) (same); In re Mut. Funds Inv. Litig., 403 F.Supp.2d 434, 449 (D.Md.2005) (same). [10] Defendants suggest that these claims have little or no effect on the market. Again, these are factors and arguments best reserved to a later stage of this litigation. [11] Accord Goodyear, 438 F.Supp.2d at 791 ("Even if the fact-finding shows that there was no intentional 'accounting gimmickry and serious mismanagement,’ Defendants can *909 still be found to have violated their ERISA-imposed fiduciary duties if they continued to invest in Goodyear stock and they had knowledge (or should have had knowledge) that the stock itself was not a good investment despite the actual cause of the decline in its value.”); AEP, 327 F.Supp.2d at 821-22 (noting that "gravamen” of complaint is "grounded in ERISA,” not fraud (quoting Rankin)); Rankin, 278 F.Supp.2d at 866 (same). It is notable as to these cases that contemporaneous securities fraud cases were dismissed. Other cases have held that beneficiaries stated an ERISA company stock claim, even though no securities fraud action was concurrently alleged. Sheirill v. Fed.-Mogul Corp. Ret. Programs Comm., 413 F.Supp.2d 842 (E.D.Mich.2006); In re RCN Litig., No. 04-5068, 2006 WL 753149 (D.N.J. Mar.21, 2006). These holdings demonstrate that ERISA cases are not inherently fraud cases and do not depend on fraud allegations; rather, they concern the fiduciary duties under ERISA to prudently manage plan investment, conduct necessary and appropriate investigation into the merits of the investment at issue, and take action when prudence so dictates. [12] See In re ADC Telecomms., Inc., No. 03-2989, 2004 WL 1683144, at *6 (D.Minn. July 26, 2004) ("[W]here fraudulent practices are alleged there is no need to plead impending collapse of the corporation .... Plaintiffs’ inability to show ADC filed bankruptcy or was on the verge of imploding does not preclude the present suit.”); Honeywell, 2004 WL 3245931, at *11 (allegations that defendant fiduciaries were privy to fraud that inflated stock prices were sufficient to overcome the presumption although the company remained financially viable); In re Sears Roebuck & Co. ERISA Litig., No. 02-8324, 2004 WL 407007, at *4-5 (N.D.Ill. Mar.3, 2004) (same). [13] See also Sears, 2004 WL 407007, at *7 (noting that, while accounting regularities *910 made up part of plaintiffs’ breach of fiduciary duty claims, "Plaintiffs also allege that publicly known macroeconomic facts were available to Defendants before the start of the class period. According to Plaintiffs, these factors, including increased competition and the general downturn of the economy, indicated there was no reason for the Plan to invest so heavily in Sears stock. Whether these macroeconomic factors existed and their effect on Sears stock are questions of fact.”) (emphasis added); Hill v. BellSouth Corp., 313 F.Supp.2d 1361, 1368-69 (N.D.Ga.2004) (upholding imprudence claims which rested to a large degree on non-fraud allegations that BellSouth was not fully forthcoming about the true risk of its unusually large corporate "bet” on its Latin American operations.). [14] The line, unfortunately, is not a bright one. Reduced to its core, the Moench/Kuper presumption of prudence provides fiduciaries a "safe harbor” until continuing to invest in company stock is "imprudent.” While the presumption may provide a "thumb on the scale” for a period of time in making that determination, at what point along a stock's decline is the thumb to be removed. Moench asks the central question of "How is an ESOP fiduciary to determine when diversification is in the best interest of the beneficiaries?” Moench, 62 F.3d. at 570. Should “nontangi-ble loyalty interests served by retaining ESOP investments in employer stock” be a factor? Can the fiduciary acknowledge that ESOPs were not designed to guarantee retirement income? These are not safe retirement funds for most average income workers. Judge Richard Posner in Summers v. State Street Bank, 453 F.3d 404, 410-411 (7th Cir.2006), makes the economically sound observation, that the prudence in continuing to hold company stock depends on how diversified the other holdings of the investor are, and that ESOPs are extremely risky for most retirement accounts. This is particularly true for employees who, upon the company failure, would lose their retirement wealth as well as their current income. Yet, such considerations regarding other holdings are apparently not permitted in ESOP cases. It seems the fiduciary cannot look to the other 401(k) investments available to the employees (here they were substantial) but only to the single ESOP fund (If such factors were allowed, class action treatment would not be appropriate because individual factors would swamp common ones.). Judge Posner also questions the capacity of courts to determine the right point or points when ESOP fiduciaries should start to diversify. Id. at 411. Kuper acknowledges that this is a "difficult area.” Kuper, 66 F.3d at 1451. In adopting the abuse of discretion standard, Kuper quotes Moench's concern about the risks of turning the standard of review for ESOPs into that of ordinary pension plans. Id. at 1458. Moench also notes the dilemma facing an ESOP fiduciary who diversified and then the company stock recovers — he also faces liability. Moench, 62 F.3d at 571-72. Kuper refers to the presumption of reasonableness being rebutted when "a prudent fiduciary acting under similar circumstances would have made a different decision.” That cannot mean finding a single prudent fiduciary in circumstances where reasonable fiduciaries could differ, because that would reduce this to a de novo standard of ERISA review for ESOPs. If there is a "zone of choice” where reasonable fiduciaries would disagree, the abuse of discretion standard must protect a fiduciary's choice not to diversity. The Moench standard to rebut the presumption is that "plaintiff must show that the ERISA fiduciary could not have believed reasonably that continued adherence to the ESOP's directions was in keeping with the settlor’s expectations of how a prudent trustee would operate.” This suggests that the standard necessary to rebut the presumption of prudence is that no reasonable fiduciary in similar circumstances would have continued investing in company stock. Only then does it seem that ESOP fiduciaries can fulfill their duties in the safe harbor that Congress seems to have intended to provide them. [15] Moreover, at the March 4, 2008, hearing. Plaintiffs presented a PowerPoint presentation showing that on December 30, 1999, the amount of Ford stock in the Plans totaled 196 million shares and was worth $10.5 billion. By December 31, 2006, the amount of Ford stock in the Plans had grown by 57% to 308 million shares, but had decreased in value by 78% to $2.3 billion. [16] Plaintiffs argue that Defendants’ post-hoc appointment of an independent fiduciary does not protect them from liability. They contend that instead of empowering a truly independent fiduciary to see to it that the Ford Stock Fund was prudently and loyally managed free of conflict or bias, Defendants appointed the independent fiduciary, bound it to follow a defective standard that is contrary to ERISA, and attempted to absolve themselves of responsibility for its actions (Compl.HV 193-95). Plaintiffs conclude that as with the 2006 amendments to the Plans it is an issue of fact whether Defendants’ actions with respect to the independent fiduciary breached their duties of prudence and loyalty under ERISA. [17] In their response, Defendants argue that the gravamen of the Complaint is that although Ford stock may have been a “suitable investment” for some investors, it was not a prudent investment for "retirement savings plans for ordinary employees” (Compl.V 101). Defendants contend that this premise cannot be squared with the Sixth Circuit's controlling decision in Kuper, which Defendants argue "places a thumb on the scale in favor of settlor intent to permit ESOPs to invest in employer stock” (Dkt.# 84, p. 2). As discussed below, the notion that Defendants could manage the investments of the Plans imprudently because the settlor wanted them to is contrary to the Defendants' fiduciaiy duty under ERISA, and in particular their duty to disregard provisions of the Plans that would lead to an imprudent result. In their Complaint, Plaintiffs take care to note that the Ford would only be a "suitable investment” for investors able to withstand the large risk of significant loses (ComplA 101). Plaintiff indicate that the Plans are retirement savings plans for "ordinary employees” and "unlike typical portfolios for institutional investors or wealthy individuals, the investment options for the Ford Plans consisted only of money market funds, mutual funds and the Ford Stock Fund.” Id. Accordingly, Plaintiffs conclude that the "highly risky Ford stock could not prudently be part of this array of investment options for several reasons,” which they go on to state in detail. Id. [18] Accord Rankin, 278 F.Supp.2d at 878-79 (holding that the fact that a plan may require investment in company stock "will not ipso facto relieve the [defendants] of their fiduciary obligations to prudently invest or to diversi[f]y” and “Contrary to the Outside Directors’ implication, a fiduciary is not required to blindly follow the Plan’s terms. Indeed a fiduciary must also act in 'accordance with the documents and instruments governing the plan,’ insofar as those documents are consistent with the provisions of ERISA.” (citation omitted)); see also U.S. *918 Dep't of Labor, Op. Ltr. No. 90-05A, 1990 WL 172964, at *3 (Mar. 29, 1990) (Dkt. # 76, Loeser Deck, Ex. B) (despite plan provisions to the contrary, it is the responsibility of fiduciaries to determine, based on all the relevant facts and circumstances, the prudence of investing large percentage of plan assets in qualifying employer securities); U.S. Dep’t of Labor, Op. Ltr. No. 83-6A, 1983 WL 22495, at *1-2 (Jan. 24, 1983) (Dkt. # 76, Loeser Deck, Ex. C) (same). [19] Defendants' suggestion that the General Motors court's analysis of the presumption is somehow contrary to Twombly is not persuasive (Dkt. #73, p. 11 n. 13). Twombly did not replace Rule 8(a)'s notice pleading requirement with a new civil procedure that requires plaintiffs to satisfy an evidentiary burden before evidence is developed in a case. The Supreme Court explicitly disclaimed that it was requiring “heightened fact pleading.’’ Twombly, 127 S.Ct. at 1965, 1973 n. 14 (“[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely ....' In reaching this conclusion, we do not apply any ’heightened’ pleading standard, nor do we seek to broaden the scope of Federal Rule of Civil Procedure 9, which can only be accomplished 'by the process of amending the Federal Rules, and not by judicial interpretation.' ”) (citations omitted); accord Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2199, 167 L.Ed.2d 1081 (2007) (quoting Twombly and noting that, under Rule 8, pleading specific facts is not necessary because “the statement need only ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.' ” (citation omitted). [20] Again referring to Judge Posner, he notes in Summers the obligation of ESOP fiduciaries “to protect the employee-shareholder against excessive risk” and he stresses how debt-equity ratio of company can be considered in evaluating whether fiduciary’s continued investment in company stock is prudent under ERISA, Summers, 453 F.3d at 411; Meyer v. Berkshire Life Ins. Co., 250 F.Supp.2d 544, 566 (D.Md.2003) (finding breach of the prudent man standard because of lack of appropriate consideration of investment's opportunity for gain versus risk of loss); (Compl.HI 244-246) (discussing excessive risk posed by Ford stock).